Abstract

We study the effect of income shocks on child health and strategic investment across siblings using data on more than 4 million children from multiple waves of the Demographic and Health Survey (DHS) spanning 50 developing countries. We identify income shocks using information on the variation of the world prices of locally produced commodities from 1960 to 2016. We find that (i) temporary income shocks in utero and in the first year of life positively affect survival, anthropometric indicators and long-term health investment up to five years after the shock; (ii) households allocate more resources to children born in good times relative to their siblings. In the last part of the paper we study the consequences of these results for aggregate child health inequality.

Practical information