Economics - General Medicaid Mental Health Public Health Public Policy

What evidence exists that a child’s health is a form of human capital?

Janet Currie has a nice review article (Currie 2020) in Health Economics covering this topic. She summarizes the literature as follows:

In the past 20 years, there has been an explosion of research demonstrating that child health is an important form of human capital. Healthier children live longer and healthier lives, get more education, and earn higher wages. Moreover, the available evidence shows that public policy can relax constraints on families and promote better child health in multiple ways, although guaranteeing access to health care and preventive health screenings remains especially important. Although improvement of physical health remains a priority, there is new understanding of the key role of child mental health for future outcomes.

Some of the more interesting studies cited in the paper are summarized briefly below.

  • Impact of Medicaid expansion on Infant mortality: Medicaid expansions for pregnant women and find that they led to an 8.5% reduction in infant mortality. – Currie and Gruber (1996)
  • Impact of Medicaid expansion on children’s long-run outcomes. Using data from NHIS, Kessler Psychological Distress Scale, HCUP, to demonstrate that Medicaid expansions lead to lower rates of chronic conditions as adults and fewer hospitalizations related to diabetes and obesity, and increased rates of high school graduation. – Miller and Wherry (2019):
  • Impact of Medicaid coverage during childhood on disability, mortality and wages. Using individual tax data and using variation in expansion of Medicaid eligibility for children, one study finds that Medicaid eligibility in childhood reduces disability and mortality and also increases wages (for females). Further, income tax paid and EITC collection falls resulting in the government being paid back 58 cents in adulthood for every dollar invested in Medicaid coverage during childhood. – Brown et al. 2019.
  • Canadian vs. US health outcomes. The authors find that in both countries, counties with higher poverty have higher mortality rates. However, the slope of this relationship is higher in US than Canada, although this relationship has attenuated in recent years in the US,–particularly among young children (ages 0-4)–perhaps due to Medicaid expansions for these children.
  • There are many other factors that affect child health and subsequent adult wages. This include reduced binge drinking frequency (Nilsson 2017), increased rates of influenza vaccination (Schwandt 2017), air pollution (Isen et al. 2017). For developing countries in particular, being exposed to infectious disease or poor nutrition affects child health and subsequent adult wages; it will be interesting to see if COVID-19 has a similar impact in developed countries.
  • Impact of fetal exposure to stress on mental health. Poor mental health, unsurprisingly, affects days worked and annual wages (Currie and Madrian, 1999). Further,  “…conditions in the fetal period can affect future mental health. For example, fetal exposure to the Dutch “ Hunger Winter”  during World War II, or to the Six-Day War in Israel, have been linked to schizophrenia.” (Susser et al. 1998, Malaspina et al. 2008)
  • Benefits of WIC on likelihood of child being diagnosed with getting ADHD. When mothers are receive Supplemental Feeding Program for Women, Infants, and Children (WIC) support (aka “food stamps” during the pre-natal period, the likelihood a child is later diagnosed with ADHD or other mental illnesses goes down. Mothers with access to WIC generally also have access to Medicaid and more direct links to maternal and child health clinics, so the exact causal mechanism is unclear (Chorniy et al. 2020)


Leave a Reply

Your email address will not be published. Required fields are marked *