health distribution
0 2 4 6 8 10 % change at 14 1 2 3 4 5Period of health improvement
Health Cognitive skill Socio-emotional skill
(a) Long-term effects on those whose health improved by round of transfer
0 1 2 3 4 Dif ference in healt h at age 15 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Income ventile
Health Cognitive skill Socio-emotional skill
(b) Overall change in average human capital among income ventiles given a health
improvement at age 11
Note: Panel(a)shows the % increase in health and cognitive and socio-emotional skill at 14 given one standard deviation improvement in health for those in the bottom 25% of the health distribution at the age shown on the x-axis. Panel(b)shows the % increase in each component of human capital at 14 among all children in each income ventile given a health improvement at age 11 to those in the bottom 25% of the health distribution. The effects were calculate by drawing 10,000 observations from the estimated initial conditions and forward simulating the child development path with and without directed income transfers in each period. It is assumed that the transfers are spent fully in the period they are given.
are in the poorest health, and whether they affect inequalities. Once more, given the effects of health improvements are homogeneous across income and health levels, the impact of these improvements will be the same as when given to the whole sample. This is shown in Figure4(a). Figure4(b)shows, however, that improving health for the unhealthiest 25% of children at age 11 (when the effects of improvements are largest) affects the composition of health at 14 in the lower end of the income distribution to a larger extent. The is also true for the skill composition, however the magnitude of these changes is much smaller. Again, this is because low-income children are more likely to have poor health and less skill at age 11. Appendix TableD30shows estimates of the short and long-term effects of these directed health improvements.
5.5
The Effects of Increases in Parental Health and Education
Finally, I simulate the developmental path of health and skills given increases to two components of parental human capital; a one standard deviation improvement to their health, and in increase in educational attainment. The increase in education is equivalent to moving parents up one level in the UK’s National Vocational Qualification (NVQ) scale. For example, if a parent obtained failing grades in lower high school exams (ages 14-16), the intervention would increase their
attainment to having passed these exams. Similarly, if they had obtained an undergraduate degree, they would be up-skilled to masters level attainment.27 These types of “interventions” can be seen as attempting to reduce the intergenerational link between parental characteristics and children’s health. For improvements to parents’ health, such improvements might come through the home-visitation style programmes discussed when outlining the effects of improvements to children’s health. These increases to parental human capital influence short-term development through their effect on both investments and the production process. As I have assumed they are time-invariant, the initial increases in parental human capital affect development through the same channels in all subsequent periods.
Table6shows the effects of these increases at 9 months on human capital at each age. Each major-column represents the relevant component of children’s human capital and each sub-column the component of parental human capital increased. Parents’ education has the largest impact on cognitive and socio-emotional development, and little effect on health. By age 14, cognition and socio-emotional skill are 3.7% and 2% higher than in the absence of the increase to parents’ education, whereas health is only 0.36% higher. Similarly, improving parental health has the largest effect on children’s health - at 8.7%, the effect on health by 14 is in fact almost as large as when improving children’s health itself at age 11 (TableD27). This effect builds over time from an initial change in health at age 3 of only 2.2%. Socio-emotional skill at 14 also increases as a result of improving parents’ health, and is just under 5% higher than it otherwise would have been. There is little effect on cognition.28
Appendix FigureD4shows that the long-term effects of increases in parents’ education are larger for children in the lower end of the income and health distributions (panels(a)and(b)), but that the effects of improvements to parents health are constant (panels(c)and(d)). This is because parents are estimated to make investments independently of their health, but not their education. As a result, increases in their attainment impact development through two channels, whereas those to health do so only through one. Second, the marginal effect of investments can vary across the income distribution (Equation8), and investments impact cognitive but not health production.
Turning again to directed interventions, FigureD5(a)shows the change in the composition of health and skills at 14 is more pronounced among those in lower end of the income distribution when parental health is only improved for the unhealthiest 25% of children. Similarly, Figure
D5(b)shows that targeting health of parents in the poorest 25% of families results in the largest changes in health and skill composition among the unhealthiest children. Again, this is an artifact of the negative relationship between skills, health and parents health at age 11.
27There are 8 NVQ levels in total. Seehttps://www.gov.uk/what-different-qualification-levels-mean/list-of- qualification-levelsfor a full list of NVQ qualification levels in England, Wales and Northern Ireland. Sottish qualifications are converted by the MCS to their NVQ equivalents.
28There is a small negative effect at 14 due to the small, statistically insignificant negative elasticity on parents’ health in the production of cognition. See Table4.