The Impacts of Parental Health Shocks on the Human Capital Accumulation of Children in Village Economies

Fan Wang, Department of Economics
| CSCC Conference Room

Using four waves of household panel data collected over ten years from rural China, I estimate the importance of parental health in the accumulation of the human capital of children in the context of small village economies. In the short term, I find that children of parents who receive bad health shocks are more likely to work and are less likely to attend school or complete grades. Over time, I find that there is an especially large and lasting scarring effect of bad parental health on young children as they age. The measure of human capital I use is the highest grade that a child has attained at different points in time. The measure of health I use combines self-reported health status, chronic conditions and health expenditure. Given the large impact of adult health on the education of children, cost-benefit analysis of rural health policies aimed at adults should take into consideration the positive externality of improved adult health on long-run human capital accumulation.