The causal effect of an Income Shock on Children's Human Capital


Mencoff Hall 205

Cristina Borra, Professor of Microeconomics and Labour Economics, University of Seville

Abstract: We investigate the causal impact of a generous unconditional cash transfer at birth on children's later health outcomes and academic performance. Using rich administrative data, we take advantage of the unexpected introduction of a “baby bonus” in Spain in 2007 and implement a difference-in-discontinuity approach comparing children born in the surrounding months in different years. We find little impact of the cash transfer on children’s health and academic performance and can bound our estimates to a reasonably tight interval around zero. We do not find an effect on household structure, maternal employment, parental time or money investments in children. There is evidence that the benefit increased household expenditure on big ticket items. However, this increase in material resources did not enhance early childhood development in the Spanish context, characterized by a generous social safety-net system.  Our results contribute to our understanding of which interventions are effective at improving children's health and human capital formation. 

Bio: Cristina Borra is a Professor of Microeconomics and Labour Economics at the University of Seville. Her research interests are in labour, population, and health economics, with a special focus on child development. She has published in the Journal of the European Economic Association, Oxford Economic Papers, Economic Inquiry, and Labour Economics, among others. She has held visiting positions at the Centre for Time Use Research, University of Oxford, and at the University of Cambridge. She is visiting the Department of Economics at Brown for the Fall Semester 2022.

Click here to add this event to your Google Calendar.