Title: Essays In Early-Life Conditions, Parental Investments, and Human Capital
Description: In my dissertation, I study the short- and long-term effects of early-life circumstances on individual’s human capital and explore some potential mechanisms driving these impacts. The focus on early-life conditions is motivated by the growing body of research showing the important role that early-life conditions play in shaping adult outcomes (Barker, 1992; Cunha and Heckman, 2007; Almond and Currie, 2011a). Evidence from natural experiments has found that adverse conditions during the in-utero and childhood periods (e.g., disease outbreaks, famines and malnutrition, weather shocks, ionizing radiation, earthquakes, air pollution) can have negative effects on health, education, and labor market outcomes (e.g., Almond, 2006; Almond et al., 2010; Van den Berg et al., 2006; Currie and Rossin-Slater, 2013; Almond, Edlund and Palme, 2009; Sanders, 2012). I focus on a particular shock which is violence – i.e., wars, armed conflicts, urban crime – that represents one of the most pervasive shocks for individual’s well-being and which mostly affects developing countries (Currie and Vogl, 2013).

The World Bank (2013) estimates that more than 1.5 billion people in the developing world live in chronically violent contexts. Violence creates poverty, accentuates inequality, destroys infrastructure, displaces populations, disrupts schooling, and affects health. While recent research has shown the large damage on education and health outcomes from early life violence (Camacho, 2008; Akresh, Lucchetti and Thirumurthy, 2012; Minoiu and Shemyakina, 2012; Brown, 2014; Valente, 2011; Leon, 2012), several key questions remain unaddressed. First, how does violence affect other domains of human capital beside education and health (i.e., cognitive and non-cognitive skills)? Identifying such effects is important both because measures of human capital (physical, cognitive, and non-cognitive indicators) can explain a large percentage of the variation in later-life educational attainment and wages (Currie and Thomas, 1999; McLeod and Kaiser, 2004; Heckman, Stixrud and Urzua, 2006) and to understand mechanisms behind previous effects found for educational attainment and health.

Second, to what extent do the effects of violence at different developmental stages (i.e., in-utero vs. in childhood) differ? Do the effects of violence persist in the long-term? Do impacts on the particular type of skill considered (e.g., health vs. cognitive outcomes) differ by the developmental timing of the shock? Third, given the size and persistence of the effects of violence, it is also natural to ask whether and how parental investments also may respond to these shocks. Family investments are important determinants of human capital (Cunha and Heckman, 2007; Aizer and Cunha, 2014) and parental responses can play a key role in compensating or reinforcing the effects of a shock (Almond and Currie, 2011a). At present, well-identified empirical evidence on this question is scarce. Finally, and perhaps most importantly from a policy perspective, is there potential for remediation?: Can social programs that are available to the community help mitigate the negative effects of violence on vulnerable children? My identification strategy exploits the temporal and geographic variation in local violence conditions.

In particular, I exploit the occurrence of specific violent events such as homicides and massacres at the monthly-year-municipality levels in Colombia and I use large and varied micro data sets to provide causal estimates. I believe that the results from my research can shed some light on the consequences of early-life exposure to violence on human capital, some of the potential mechanisms through which these impacts operate, and provide some insights on possible public policy implications. In the first essay, “Early-life Conditions, Parental Investments, and Child Development: Evidence from a Violent Country,” I investigate how exposure to community violence during the in utero and childhood periods affect a child’s physical, cognitive, and socio-emotional development; how violence affects parental investments such as parenting quality; and whether social policies available to the community help mitigate the negative effects of violence on children. I focus on children, which is a particularly vulnerable subpopulation: Children in developing countries are subject to more and more frequent adverse conditions, start disadvantaged, and receive lower levels of investments compared with children from wealthier environments (Currie and Vogl, 2013).

I show that children exposed to massacres in their municipality during their in utero and in childhood periods achieve lower health, cognitive, and socio-emotional outcomes and that the timing in which these exposures occur matters. In particular, exposure to massacres in late pregnancy and in childhood reduce child’s health and exposures in early pregnancy and in childhood lower cognitive test scores. Adequate interaction, an indicator of child socio-emotional development, falls among children who were exposed to violence after birth. Moreover, results show that violence is negatively associated with birth weight, an important input in the production of human capital. This impact is driven by exposure during the first trimester of pregnancy. Furthermore, I find that changes in violence during a child’s childhood are associated with lower quantity and quality of parenting. In particular, I find that an increase in violence is associated with a decline in the time mothers spend with their child, a decrease in the frequency of routines that stimulate a child’s cognitive development, and an increase in psychological aggression, which could reflect a mother’s stress.

Overall, these results show little evidence that parents compensate the negative effect of violence on child outcomes. This is the first study to investigate the effects of early-life violence on child cognitive and non-cognitive outcomes in a developing country and among the first to investigate the role of parenting as a potential channel of transmission. Lastly, I find weak evidence that social programs have remediating impacts on children affected by violence. In the second essay, titled “The Hidden Costs and Lasting Legacies of Violence on Education: Evidence from Colombia”, I provide evidence of the long term impacts of exposure to crime and violence, from the prenatal period to age five, on an individual’s educational attainment. My identification strategy exploits the temporal and geographic variation in cohorts of individuals exposed to homicide rates during in their early lives during the 1980s and 1990s in Colombia, a period with an unprecendented rise in criminal activity. I use Census data that provide detailed information on the date and municipality of birth, and long-run outcomes (i.e., education) for each individual, which enables me to identify the violence to which a person was exposed in utero and in early childhood (as well as in later stages).

I find that high violence in early-life is associated with lower educational attainment in the future (years of schooling and lower school enrollment). The findings also show that in utero and early-childhood exposure to violence has a more pronounced impact on human capital attainment than exposure at other stages of the life course (i.e., school age, adolescence). The timing and the magnitude of the effects are important considering the huge inequality in education in developing countries.