Economic Shocks and Infant Health: The Intergenerational Effects of Import Competition in the U.S.

Abstract

This paper investigates the intergenerational health impacts of a persistent negative economic shock faced by individuals residing in the United States. Specifically, the paper examines the impact of economic shocks in local labor markets on infant health by exploiting the increasing import competition from China between 2005 and 2015 on U.S. commuting zones as a plausibly exogenous source of variation in household economic conditions. Using yearly restricted-access data from the Natality Vital Statistics and yearly measures of the U.S local labor markets' exposure to import competition at the per capita level, this paper provides evidence that negative shocks in the form of worsening local labor market conditions are associated with a negative impact on infant health outcomes. Results indicate that increased import penetration from China in U.S commuting zones led to a reduction in the average birthweight and an increase in the incidence of low birthweight. Analyses of transmission mechanisms suggest worsening household economic circumstances as a result of negative labor market outcomes in the form of reduced wages, reduced household income per capita and increased reliance on food stamps, reduced access to healthcare and an increase in mental health declines among women of childbearing age.