Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/115106
Authors: 
Halla, Martin
Zweimüller, Martina
Year of Publication: 
2014
Series/Report no.: 
NRN Working Paper, NRN: The Austrian Center for Labor Economics and the Analysis of the Welfare State 1401
Abstract: 
Little is known about the response behavior of parents whose children are exposed to an early-life shock. In this paper we interpret the prenatal exposure of the Austrian 1986 cohort to radioactive fallout from the Chernobyl accident as a negative human capital shock and examine their parents’ response behavior. To identify causal effects we can rely on exogenous variation in the exposure to radioactive fallout (over time and) between communities due to geographic differences in precipitation at the time of the accident. We find robust empirical evidence of compensating investment behavior by parents in response to the shock. Families with low socioeconomic status reduced their family size, while families with higher socioeconomic status responded with reduced maternal labor supply. Compensating investment made by the latter group seems relatively more effective because we do not find any detrimental long-term effects for exposed children from higher socioeconomic backgrounds. In contrast, exposed children from low socioeconomic backgrounds have significantly worse labor market outcomes as young adults.
Subjects: 
Fetal origins
parental response
Chernobyl
radiation
health
culling
human capital
fertility
labor supply
JEL: 
I18
I20
Q48
Q53
J24
Document Type: 
Working Paper

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