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Seminarios académicos y conferencias

Florencia Borrescio, Universidad Adolfo Ibáñez

Inequality, Relative Income and Newborn Health

30 Noviembre 2016 - 15:30

Sala 113, Facultad de Ciencias Económicas y Administrativas UC

A major concern over rising inequality is its potential to reduce intergenerational mobility, leading to even greater inequality in the next generation. We estimate the impact of rising inequality over the period 1970-2010 on offspring health at birth, a measure of human capital that has been shown to be highly correlated with future education, IQ and income. We define inequality three ways: as a group-level measure (the Gini coefficient for each state or county), as an individual-level measure of relative deprivation, and as an ordinal measure of rank. We document a strong negative relationship between the Gini and newborn health in the cross section, but find that including a modest set of controls, limiting variation to changes in inequality over time within an area, or instrumenting for inequality eliminates the relationship between the Gini and newborn health completely. However, this null result likely reflects heterogeneity in the effect of rising inequality. When we estimate the impact of relative deprivation or rank on newborn health, we find negative and significant effects of having relatively less income than one’s neighbors on birth weight, even after for controlling for area fixed effects and instrumenting for differences in the income distribution.