Reducing Inequality Through Complementarities in Investments in Education and Health

In the past decades, many Western societies have experienced a sharp increase in childhood inequalities along many dimensions, including education, income, and physical, and mental health. These inequalities pose considerable challenges to well-being, and there is an acute need for rigorous research to inform the design of cost-effective policies to address them. Using Norwegian administrative data and data from several U.S. surveys, this project studies what combination of policies is necessary to level the playing field between poor and rich children. The findings indicate that low-cost policies such as well-child visits compensate for in utero exposure to infectious diseases and have sustainable effects that even increase educational outcomes of the directly affected women's children. In addition, the findings show that subsequent policies for the treatment of mental health have reinforced effects on labor market outcomes and that low-touch policies targeted at young children of individuals diagnosed with mental health issues lower the intergenerational persistence of mental health diagnoses. Last, the findings present empirical evidence for complementarities in pollution exposure. Overall, the project's findings benefit policy-makers globally by informing the design of early life policies that reduce social, economic, and health inequalities cost-effectively.

In the past decades, many Western societies have experienced a sharp increase in inequalities along many dimensions, including education, income, and physical and mental health. These inequalities pose considerable challenges for the wellbeing of recent cohorts, and there is an acute need for rigorous research to inform the design of cost-effective policies to address them. Such research is, however, complex and requires a deep understanding of the causal processes underlying these inequalities. In this project, we aim to understand the dynamic processes through which multiple policies interact in affecting the emergence and evolution of inequalities. Causally identifying interactions among policies requires (quasi)randomization in multiple periods or across multiple policies. To date, only a handful of papers were able to overcome this obstacle. In this project, we make use of administrative data from Norway paired with different interventions that allow us to empirically answer whether there is a dynamic component to human capital investment and in which periods human capital may be particularly affected by interventions. In particular, we study complementarities in infant health, early-life education, nutrition, and mental health and we will carry out four separate projects answering whether: (1) infant health care offsets damages from in utero disease exposure, (2) access to educational TV increase the returns to early child care, (3) health endowments alter the effects of high-caloric nutrition shocks, and (4) there are dynamic complementarities in mental health. The unique combination of knowledge about policy interventions or health shocks and high-quality register data will enable us to contribute to the international research frontier in labor and health economics. Additionally, our research will benefit policy-makers by informing the design of early life policies that can reduce social, economic and health inequalities.