Intergenerational consequences of in-utero and early-life conditions

This thesis comprises three self-contained chapters in applied microeconometrics, with an overall underlying theme of exploring the intergenerational transmission of effects of early-life conditions on human capital outcomes. Chapter 2 traces the impacts of in-utero exposure to negative rainfall shocks on the outcomes of grandchildren of those affected using representative survey data from the India Human Development Survey (IHDS). I find that (a) exposure to rainfall shock during pregnancy has strong negative effects that pass down to health and cognitive ability of the third generation; and (b) biological explanation, plausibly genetic and epigenetic inheritance, may be the key transmission mechanism of these effects. Chapter 3 investigates the gender-differential response of parents’ expenditure to changes in child’s health due to negative rainfall shocks in early childhood. I link the rural sample of Young Lives survey for Andhra Pradesh, India with the district-level monthly rainfall data, and use an instrumental variable framework. Findings show that when negative rainfall shocks adversely affect children during early childhood, parents compensate by investing more in their education. My results uncover gender discriminatory investment behaviour, where parents invest more in education of a boy as compared to a girl. Chapter 4 analyses the intergenerational effects following the positive changes in women’s inheritance rights. I employ a difference-in-differences strategy and exploit the state level variation in a woman’s exposure to the Hindu Succession Amendment Act in India. Using the IHDS data, I find that the property rights reform significantly increased the health of children whose mothers were exposed to the amendment. Further analysis reveals a substantive gender-differential pattern; the health of daughters is significantly worse than that of sons, but is only visible in children with less educated mothers. I discuss mothers’ improved bargaining power in household decisions as the main channel through which the reform operates.