Abstract
Some consequences of adverse events early in life for labor market outcomes may emerge early and others only later in adult life. We use data from the Survey of Health, Ageing and Retirement in Europe to investigate how early life circumstances—childhood health and socioeconomic status (SES)—are associated with various labor market outcomes over an individual’s entire life cycle. Our main new finding is that these associations change significantly over the life cycle. For instance, the association of childhood SES with lifetime earnings is shown to become stronger over the life cycle and to operate through both working years and annual earnings. We discuss how our findings can explain some of the mixed evidence on these associations in previous literature. Our results also shed light on the potential gains in the different labor market outcomes of public policies that invest in children’s health and parents’ SES.
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Acknowledgments
The SHARE data collection has been primarily funded by the European Commission through the 5th Framework Program (project QLK6-CT-2001-00360 in the thematic program Quality of Life), through the 6th Framework Program (projects SHARE-I3, RII-CT-2006-062193, COMPARE, CIT5-CT-2005-028857, and SHARELIFE, CIT4-CT-2006-028812), and through the 7th Framework Program (SHARE-PREP, N° 211909, SHARE-LEAP, N° 227822 and SHARE M4, N° 261982). Additional funding is also gratefully acknowledged from the U.S. National Institute on Aging (U01 AG09740-13S2, P01 AG005842, P01 AG08291, P30 AG12815, R21 AG025169, Y1-AG-4553-01, IAG BSR06-11 and OGHA 04-064) and the German Ministry of Education and Research, as well as from various national sources (see http://www.share-project.org/ for a full list of funding institutions). We use release 2.6.0 of waves 1 and 2, and release 1 of wave 3 (SHARELIFE). We also use data from the generated job episodes panel; for methodological details see the SHARE working paper 11-2013 “Working life histories from SHARELIFE: a retrospective panel” by Brugiavini, Cavapozzi, Pasini and Trevisan.
We wish to thank Peter van Santen for sharing his do-files for constructing our measure of lifetime earnings, and Rob Alessie, Bob Haveman, Sergi Jiménez, John Mullahy, Giacomo Pasini, Elisabetta Trevisan, Bobbi Wolfe, and the seminar participants at University of Wisconsin-Madison, University of Southern California, City University London, Ca′ Foscari University of Venice, RWI Essen, the 2014 Netspar International Pension Workshop in Amsterdam, the 4th SHARE user conference, the 33rd Jornadas de la Asociación de Economía de la Salud, and the 10th Jornadas de la Asociación Española de Economía del Trabajo for valuable comments and discussions.
Funding
We gratefully acknowledge financial support from Asociación Española de Economía de la Salud and Química Farmacéutica Bayer through the XXII Beca de Investigación en Economía y Salud for the project “The effects of early life circumstances over the life-cycle: A European cross-country comparison”. Pilar García-Gómez acknowledges funding from the Netherlands Organization for Scientific Research under the Innovational Research Incentives Scheme—VENI.
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Flores, M., García-Gómez, P. & Kalwij, A. Early life circumstances and labor market outcomes over the life cycle. J Econ Inequal 18, 449–468 (2020). https://doi.org/10.1007/s10888-020-09446-7
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DOI: https://doi.org/10.1007/s10888-020-09446-7