What doesn't kill you makes you poorer: Adult wages and early-life mortality in India

Highlights

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  Studies early-life disease environment and adult wages for men in India.

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  Robust negative gradient between infant mortality and wages decades later.

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  10 point IMR reduction associated with approximately 2 percent wage increase.

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  Not mediated by level of schooling received.

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  Due to fiscal externality, public health investments could have low net present cost.

Abstract

A growing literature indicates that effects of early-life health on adult economic outcomes could be substantial in developing countries, but the magnitude of this effect is debated. We document a robust gradient between the early-life mortality environment to which men in India were locally exposed in their district and year of birth and the wages that they earn as adults. A 1 percentage point reduction in infant mortality (or 10 point reduction in IMR) in an infant's district and year of birth is associated with an approximately 2 percent increase in his subsequent adult wages. Consistent with theories and evidence in the literature, we find that the level of schooling chosen for a child does not mediate this association. Because of its consequences for subsequent wages, early-life health could also have considerable fiscal externalities; if so, public health investments could come at very low net present cost.