MONEY TRANSFER AND BIRTH WEIGHT: EVIDENCE FROM THE ALASKA PERMANENT FUND DIVIDEND. (23rd June 2015)

• Record Type: Journal Article
• Authors: Chung, Wankyo; Ha, Hyungserk; Kim, Beomsoo
• Is Part Of: Economic inquiry. Volume 54:Number 1(2016)
• Page Start: 576
• Page End: 590
• Publication Date: 2015-06-23
• Subjects: Economics -- Periodicals; 330.05
• DOI: 10.1111/ecin.12235
• Languages: English
• ISSNs: 0095-2583

Abstract

Abstract: The positive relationship between income and health is well established. However, the direction of causality remains unclear: do economic resources influence health, or vice versa? Exploiting a new source of exogenous income variation, this study examines the impact of the Alaska Permanent Fund Dividend (APFD) on newborns' health outcomes. The results show that income has a significantly positive, but modest effect on birth weight. We find that an additional $1, 000 ($2, 331 in 2011 dollars) increases birth weight by 17.7 g and substantially decreases the likelihood of a low birth weight (a decrease of around 14% of the sample mean). Furthermore, the income effect is higher for less‐educated mothers. Based on a gestation‐weight profile in the sample, increased gestation owing to the APFD could explain a maximum of 34%–57% of the measured weight increase, although we are unable to examine all the potential mechanisms. ( JEL I10, I18, I12)