The Winter's Tale: Season of Birth Impacts on Children in China∗ Pushkar Maitra,y Nidhiya Menonzand Chau Tranx January 2020 Abstract This paper examines the effect of season of birth on height and cognitive and non-cognitive skills of Chinese children. We find that the child's season of birth has a significant impact on the height of girls aged less than 5 years in agricultural households: girls born in winter are 0.4 standard deviations shorter as compared to girls born in other seasons. We find, however, that this relative height differential does not translate to deficits in cognitive and non-cognitive skills when girls are adolescents aged 10{15 years. We show that compensating investments by parents, manifested through higher parental expectations regarding educational attainment for poorly endowed winter-born girls, may be an explanation for why the initial height disadvantage does not have lasting negative implications when girls are older. Key Words: Child Health, Cognitive and Non Cognitive Skills, Compensating Investments, Season of Birth, China JEL Codes: O15, I15, J13 ∗We thank two anonymous referees and the Associate Editor of this journal, Samia Badji, Diana Contreras Suarez, Joseph Cummins, Adeline Delavante, Umair Khalil, Claudio Labanca, Rigissa Megalokonomou, Russell Smyth and seminar and conference participants at Monash University, the Australian Development Economics Workshop (ADEW), the Italian Summer School in Development Economics (SSDEV), the Australian Health Eco- nomics Society (AHES) meetings, the PacDev meetings, and Williams College for comments and suggestions. The data are from the China Family Panel Studies (CFPS) funded by 985 Program of Peking University, and carried out by the Institute of Social Science Survey of Peking University. The usual caveat applies. yDepartment of Economics, Monash University, Clayton Campus, VIC 3800, Australia. Email: [email protected] zDepartment of Economics, MS 021 Brandeis University, Waltham, MA 02453, USA. Email: [email protected] xDepartment of Economics, Monash University, Clayton Campus, VIC 3800, Australia. Email: [email protected] 1 Introduction This paper examines the effect of season of birth on long-term health, and cognitive and non- cognitive ability of Chinese children. There is now a growing literature that examines the effects of early childhood conditions on outcomes later in life. Specifically, it is argued that the time of the year when a child is born matters. The literature has documented that the time of birth and neonatal health can affect the outcomes of very young children including infant mortality (Breschi and Livi-Bacci, 1997), their health as adults (Weber et al., 1998), susceptibility to diseases and disabilities (Muhuri, 1996), their life span (Doblhammer and Vaupel, 2001), and cognitive ability (McGrath et al., 2006, Venkataramani, 2012, Figlio et al., 2014). The economics literature from both developed and developing countries suggests that the time of the year the child is born impacts human capital development. For example, Angrist and Kruger(1991) finds that in the US, children born during the first quarter of the year have lower average levels of education than children born later in the year. Almond and Mazumder(2011) notes that in-utero exposure to Ramadan (the Islamic month of fasting) results in lower birth weight and a higher probability of long term disability. Using data from India, Lokshin and Radyakin(2012) reports that children born during the monsoon months have lower anthropometric scores compared to children born in the post-monsoon and winter months. Shah and Steinberg(2017) finds that more early-life rainfall is associated with higher test scores in both math and reading. We examine the impact of season of birth on children born in agricultural and non-agricultural households in China, after ruling out selection into season of birth (i.e., after ensuring that births are not timed). Much of the literature on the effect of season of birth on child outcomes has focused on the effect of the monsoon (for example Maccini and Yang, 2009, Tiwari et al., 2017).1 However, depending on the context, births in other seasons of the year may also have adverse implications for children. For instance in environments where food cannot be stored easily, 1In developing countries like China where agriculture is an important source of livelihood, the monsoon season is crucial and can affect child outcomes in multiple ways. By influencing agricultural production, the timing of the monsoon is correlated with resource availability within the household, which can positively influence the health of children. However, the monsoon is also associated with an enhanced disease environment, which can have a negative effect on the health of children in agricultural households. 1 winter is often a season of shortages, and this is particularly true in China.2 Brown et al.(2011) argues that during specific events and festivals, poor households in China engage in status seeking behavior by increasing their spending on socially observable goods. The Lunar New Year, which is typically in winter, is one such event. By limiting liquidity, such spending could further exacerbate resource constraints within households with adverse effects on child health and development. In an important exception to the expectation that winter-born children will be adversely affected, Bai et al.(2018) analyzes the influence of season of birth on health outcomes of children aged 8{10 months and find that those born in winter have an advantage as compared to those born in the summer months. This is because winter-born children reach 6 months of age (a critical threshold when food intake patterns change) during the summer when there are more varieties of food available, the food is of greater nutritional value, and parents spend more time with their children outside, all of which are beneficial to child health outcomes such as anemia and cognitive and psychomotor development. However, their sample is restricted to a poor rural Northwestern region of China, and the children they examine are evaluated at very young ages of 8{10 months which are close to the important developmental threshold of 6 months. Given growth trajectories and other rapid changes at these early ages, it is hard to be sure that the documented patterns will be long-lasting. We examine a nationally representative sample of children focusing on differences by gender and socio-economic status at comparable and older ages where plausibly, growth is still positive but relatively more stable due to gradients that are less steep.3 We find that relative to girls born in winter in agricultural households, girls born in the non-winter seasons (pre-monsoon, monsoon and post-monsoon) have significantly higher HAZ, the widely accepted proxy for long- term health.4 The relative effect is the strongest and most persistent for children born in the post-monsoon season. There is no effect of season of birth on birth weight, which indicates that the season of birth effect on health is not due to what happens in-utero; rather it may be the result of circumstances the household faces after the child is born. An explanation is that the 2Figure A1 presents the crop calendar for China. This shows that there is very little agricultural produc- tion/activity during the winter months. 3 Currie(2009) and Currie and Vogl(2013) note that two-thirds of adult height is decided by the age of 5 years, often by 2{3 years. 4See discussion in Section3 on the use of HAZ as a measure of long term health of children. 2 early nutritional deprivation that girls may face (in the period after being born) is exacerbated in winter months when households are particularly resource-constrained. We further investigate whether such initial disadvantages have lasting impacts. This is in light of the evidence that height disadvantages in early life can have resonating impacts in terms of cognition as these children age through adolescence and adulthood (Martorell et al., 2005, Case and Paxson, 2008). Such impacts are also evident when considering non-cognitive skills (Heckman, 2000, Persico et al., 2004, Schick and Steckel, 2010). We find that there is little effect of season of birth on the cognitive and non-cognitive ability of these children in adolescence. In particular, while girls in agricultural households born in winter have lower relative HAZ as of age 5, this disadvantage does not translate to lower cognitive or non-cognitive development in a sample of 10{ 15 year old winter-born girls. We hypothesize that this is because conditional on observed health, there are compensating investments on the part of parents so that early childhood disadvantages do not have persisting consequences.5 We find that such compensating investments take the form of parents investing additional time and resources in girls born in winter. These results corroborate the findings of Leight et al.(2015) which uses the Gansu Survey of Children and Families (GSCF) data and shows that the effect of early life shocks on cognitive skills of children declines over time. This study argues that compensatory strategies by parents contribute to this decline in the impact of early life shocks. Our results are consistent with an income equalization hypothesis and with the notion of dynamic compensatory investments on the part of parents, who, as demonstrated in other contexts, spend more inputs on their relatively underprivileged children (Behrman and Rosenzweig, 2004, Almond and Mazumder, 2013, Adhvaryu et al., 2018, Leight and Liu, 2018). We use parental expectations on the educational attainment of children conditional on observed health and other individual and household characteristics as a proxy measure for why parents may engage in compensating behaviour. Parental expectations can be a key indicator of parents' involvement and investments in children's education (Fan and Chen, 2001), and can potentially be a crucial determinant in forming children's attitudes towards education (Wood et al., 2007).