Does the Investment Response to a Low Birth Weight Outcome Vary Across Families?

By Brandon Restrepo, Max Weber Fellow in ECO 2012-2013

Children who, at birth, weigh in at below 2500 grams – the medical definition of a low birth weight outcome – have been shown to do less well than normal birth weight children in a variety of domains. For example, low birth weight children do less well in school, have less schooling, earn lower wages, and are less likely to be employed than their counterparts who were born with a normal birth weight. Recent evidence also indicates that low birth weight children born to low-income and low-educated parents fare worse in the long run, relative to their normal birth weight siblings, than do their counterparts born to high-income and high-educated parents. Could these differential effects of low birth weight on child outcomes across socioeconomic groups be driven by differences across families in how parents allocate resources across their low and normal birth weight children?

To shed light on this question, in a recent study I examined whether there are differences by parental education and income in human capital investment responses to a low birth weight outcome. In my analysis, I used U.S. data on children born to female respondents of the 1979 cohort of the National Longitudinal Survey of Youth. To measure parental investment in child human capital, I used a well-validated measure of parental investment in child human capital, namely, the Home Observation for Measurement of the Environment (HOME) assessment. The HOME assessment contains a rich array of measures of both the quality and quantity of parental investments in the cognitive and noncognitive human capital of their children. I find that parental investment in response to a low birth weight outcome is compensatory in high-education families and reinforcing in low-education families. That is, low birth weight children born to high-educated parents receive more investment relative to their normal birth weight siblings, while low birth weight children born to low-educated parents receive relatively less investment. The investment patterns by income are qualitatively similar, but much smaller in magnitude.

In the epidemiology literature, the well-known fetal origins hypothesis states that the intrauterine environment programmes adult disease, and many studies in the economics literature have found evidence that economic outcomes are also strongly affected by fetal health. While the most prominent proponent of the fetal origins hypothesis, David J. Barker, argues that, “[t]he womb may be more important than the home,” my findings indicate that the observed effects of low birth weight on child outcomes capture both biological factors and parental investment responses to a low birth weight outcome. Interactions between parental education and low birth weight are important in explaining why low birth weight affects child outcomes. In particular, given the investment patterns I observe by education, the adverse biological effects of a low birth weight outcome may be mitigated by high-educated parents and aggravated by low-educated parents.

Compared to their counterparts born in more advantaged families, low birth weight children born to disadvantaged families suffer from double jeopardy; they receive less overall investment and less investment relative to their normal birth weight siblings. The incidence of low birth weight is also higher in disadvantaged families than in more advantaged families. An implication of my results is that there may be scope to offset the negative consequences of a low birth weight outcome for children born to disadvantaged parents. For example, a policy that manages to increase parental education at the low end of the education distribution may promote the upward economic mobility of low birth weight children, by inducing parents to adopt compensatory or less reinforcing investment strategies.