Can Universal Cash Transfer Save Newborns’ Birth Weight During the Pandemic?

Abstract

Birth weight is a key human biological characteristic as a measure of prenatal development and a variable related to later quality of life. Studies have firmly established that a stressful situation in utero adversely affects newborns’ birth weight. Using birth statistics provided by Statistics Korea, this study examined how universal cash transfer during the COVID-19 crisis affected newborns’ birth weight in South Korea. Given that the normal gestation period is nearly 10 months, we chose newborns without a self-selection issue by utilizing information on birthdate and total pregnancy period from the dataset, subsequently applying difference-in-differences estimation. Results showed that universal cash transfer offset newborns’ weight loss amid the COVID-19 pandemic. The effects differed according to households’ sociodemographic characteristics, with effects being more pronounced for girls; more pronounced for households with more than two children; more pronounced in local districts severely affected during the initial stage of the pandemic, but less significant in metropolitan regions; and more among middle-class families. This study presents evidence that governmental cash transfer during the pandemic has improved newborns’ health and that continuing such a policy would positively impact future generations from a health perspective.