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NBER Reporter NATIONAL BUREAU OF ECONOMIC RESEARCH A quarterly summary of NBER research No. 4, December 2016 Program Report ALSO IN THIS ISSUE The Division of Germany and Population Growth The Program on Children West German cities close to the East-West border declined in relative size a er division Total population, indexed to 1.0 starting in 1919 1.8 Janet Currie and Anna Aizer* Division Other West German cities Reunification 1.6 Cities along the East-West German border 1.4 U.S. public programs that are targeted to children and youth have 1.2 grown rapidly in recent decades. This trend has generated a substantial volume of research devoted to program evaluation. At the same time, 1.0 researchers have developed an expanded conception of human capi- 1920 1930 1940 1950 1960 1970 1980 1990 2000 Source: S. J. Redding and D. M. Sturm, American Economic Review, 2008 tal and how it develops over the life course. This has drawn attention to children’s physical and mental health, as well as to factors such as environmental exposures and maternal stress that influence the devel- opment of both non-cognitive and cognitive skills. Researchers in the Quantifying Agglomeration Program on Children have been active contributors both to the evalu- and Dispersion Forces 12 ation of programs for children and to our developing understanding Income Risk over Life Cycle and Business of the roots of human capital formation. This review provides a par- Cycle: New Insights from Large Datasets 16 tial summary of this work. The number of research studies in the last eight years unfortunately makes it impossible to discuss all of the rel- What Can Housing Markets Teach Us evant contributions. about Economics? 21 Teachers, Schools, and Student Performance 26 Long Run Consequences of Conditions in Early Life NBER News 29 The original “fetal origins” hypothesis held that poor nutrition Conferences 30 during the fetal period could have persistent effects on metabolism Program and Working Group Meetings 33 that could lead to adult disease. Economists in the children’s group NBER Books 46 have broadened the scope of inquiry beyond a narrow focus on fetal nutrition to examine factors beyond prenatal nutrition, shocks in early childhood as well as the fetal period, and a much broader array of out- comes. Douglas Almond, Bhashkar Mazumder, and Reyn Van Ewijk show, for example, that nutritional restriction due to Ramadan fasting is associated with lower child test scores at age seven.1 Joseph Ferrie * Janet Currie and Anna Aizer are the codirectors of the NBER Program on Children. Currie is the Henry Putnam Professor of Economics and Public Affairs at Princeton University and the codirector of Princeton’s Center for Health and Wellbeing. Aizer is an associate professor of eco- nomics and public policy at Brown University. Reporter OnLine at: www.nber.org/reporter and Karen Rolf show that socioeconomic status in a high school.3 Anna Aizer, Shari Eli, Ferrie, and Adriana Expansions of Medicaid and the household when children are ages 0 to five is his- Lleras-Muney show that cash transfers to poor families at Value of Medical Care NBER Reporter torically associated with longevity and health in the early decades of the 20th century led to increases in the income and longevity of children One of the most important policies that affected children in those households.4 Similarly Fredrik born in the late 20th century was the expansion of public Parental Unemployment and Children’s Later Life Health Andersson, John Haltiwanger, Mark health insurance under the Medicaid program. State govern- The National Bureau of Economic Research is a private, nonprofit research orga- Kutzbach, Giordano Palloni, Henry ments were first incentivized and then required to expand cov- nization founded in 1920 and devoted to objective quantitative analysis of the Cumulative incidence of heart disease in later life for boys under age 5 in 1900 American economy. Its officers and board of directors are: .5 Pollakowski, and Daniel Weinberg show erage to children in poor families, and many states expanded Household head unemployed ≥ 6 months that, once the endogeneity of public coverage to children with family incomes up to 200 percent of President and Chief Executive Officer — James M. Poterba housing use is accounted for, child- the federal poverty line. Because the expansions occurred at Controller — Kelly Horak .4 Corporate Secretary — Alterra Milone hood residence in supported housing, different times in different states and affected some age groups BOARD OF DIRECTORS which has a large cash value, has posi- and not others, it is possible to identify the effect of insurance. 14 Chairman — .3 tive effects on young adult earnings and Currie, Sandra Decker, and Wanchuan Lin, Bruce Martin B. Zimmerman 15 Vice Chairman — Karen N. Horn No unemployment reduces the probability of incarcera- Meyer and Laura Wherry, David Brown, Amanda Kowalski, Treasurer — Robert Mednick tion.5 A possible caution: Gordon Dahl, and Ithai Lurie,16 and Wherry, Sarah Miller, Robert Kaestner, .2 DIRECTORS AT LARGE Andreas Ravndal Kostoi, and Magne and Meyer17 all examine the long-term effect of these expan- Peter Aldrich Mohamed El-Erian Michael H. Moskow Mogstad show that family welfare par- sions on individuals who gained coverage as young children. Elizabeth E. Bailey Jacob A. Frenkel Alicia H. Munnell .1 ticipation can increase the probability They focus on different datasets and find positive effects on John H. Biggs Judith M. Gueron Robert T. Parry John S. Clarkeson Robert S. Hamada James M. Poterba that children grow up to par- Don R. Conlan Peter Blair Henry John S. Reed ticipate themselves.6 0 The Moving to Opportunity Experiment and Children’s Future Income Kathleen B. Cooper Karen N. Horn Marina v. N. Whitman 75 80 85 90 95 100 Neighborhood condi- 10-year-olds benefited from voucher; older children did not Charles H. Dallara Lisa Jordan Martin B. Zimmerman Later life age (Boys ≤ 5 in 1900 in homeowner households) tions while young are another George C. Eads John Lipsky Impact of voucher in childhood on income a er age 24 Jessica P. Einhorn Laurence H. Meyer Source: 1900 U.S. Census data and analysis in J. Ferrie and K. Rolf, NBER Working Paper No. 17016 important determinant of $4000 longer-term outcomes. Jens DIRECTORS BY UNIVERSITY APPOINTMENT Figure 1 Ludwig, Greg Duncan, Lisa 2000 Timothy Bresnahan, Stanford Benjamin Hermalin, California, Berkeley old age [Figure 1].2 David Autor, David Figlio, Gennetian, Lawrence Katz, Ronald Kessler, Pierre-André Chiappori, Columbia Marjorie B. McElroy, Duke Alan V. Deardorff, Michigan Joel Mokyr, Northwestern Krzysztof Karbownik, Jeffrey Roth, and Melanie Jeffrey Kling, and Lisa Sanbonmatsu summarize 0 Ray C. Fair, Yale Andrew Postlewaite, Pennsylvania Wasserman link contemporary birth and school- long-term effects of the Moving to Opportunity Edward Foster, Minnesota Cecilia Elena Rouse, Princeton ing records in Florida to show that disadvantaged experiment, which enabled some poor families to John P. Gould, Chicago Richard L. Schmalensee, MIT -2000 Mark Grinblatt, California, Los Angeles David B. Yoffie, Harvard boys tend to have lower test scores, more disciplin- move to less-poor neighborhoods, and find rela- Bruce Hansen, Wisconsin-Madison ary problems, and less likelihood of completing tively little effect on children in those families.7 -4000 DIRECTORS BY APPOINTMENT OF OTHER ORGANIZATIONS However, Raj Chetty, Nathaniel Hendren, and Katz find that the younger children in those fam- Jean-Paul Chavas, Agricultural and Applied Economics Association -6000 Martin Gruber, American Finance Association ilies did benefit from moving in terms of higher Arthur Kennickell, American Statistical Association The Program on Children future incomes [Figure 2].8 Chetty, Hendren, Jack Kleinhenz, National Association for Business Economics -8000 The Program on Children, which was launched in Patrick Kline, and Emmanuel Saez argue that 10 12 14 16 Robert Mednick, American Institute of Certified Public Accountants Child’s age Alan L. Olmstead, Economic History Association 1993 as the program on the Economic Well-Being of features of neighborhoods that promote social Shading represents 95% confidence intervals Peter L. Rousseau, American Economic Association Children, has 134 affiliated researchers. It has produced mobility include low residential segregation, less Source: R. Chetty, N. Hendren, and L. F. Katz, NBER Working Paper No. 21156 Gregor W. Smith, Canadian Economics Association William Spriggs, American Federation of Labor and about 600 NBER Working Papers since the last review income inequality, better schools, more social 9 Figure 2 Congress of Industrial Organizations in The NBER Reporter, which former program director capital, and more family stability. Bart van Ark, The Conference Board Jonathan Gruber prepared in 2008. Many Pro gram on Children researchers document lon- diverse young adult outcomes, including maternal reports of Many of the first economic studies concerning ger-term effects of specific policy initiatives. Hilary Hoynes, health, hospitalization for chronic conditions, and employ- The NBER depends on funding from individuals, corporations, and private foundations to maintain its independence and its flexibility in choosing its the well-being of children focused either on family for- Diane Schanzenbach, and Douglas Almond find positive ment and earnings. Figure 3, from Wherry et al. (on the fol- research activities. Inquiries concerning contributions may be addressed to James mation and parental behavior or on formal education, effects of childhood participation in the Food Stamp Program lowing page), shows the reduction in hospitalizations for M. Poterba, President & CEO, NBER, 1050 Massachusetts Avenue, Cambridge, including both K–12 and college. Today, these topics on future adult health, as measured by reductions in rates of chronic conditions among young adults who had Medicaid MA 02138-5398. All contributions to the NBER are tax deductible. remain important. high blood pressure, obesity, and diabetes.10 Gabriella Conti, coverage from early childhood.