Eric Gould, Victor Lavy and Daniele Paserman June 2008 CMPO Conference

1. Sixty Years after the Magic Carpet Ride: The Long Run Effect of Early Childhood Environment on Social and Economic Outcomes Eric Gould, Victor Lavy and Daniele Paserman June 2008 CMPO Conference

2. Economic Effects of an Individual’s Early Childhood Conditions • Major interest to social scientists: how much does the environment matter for outcomes? • Yet, drawing causal inference about this relationship is complicated due to: • Unmeasured individual heterogeneity that affect outcomes and childhood environment • Severe data limitation that restrict long follow up from childhood to adulthood.

3. Most related literature • Oreopoulos (2003) examines effect of neighborhood on labor market outcomes 30 years later • Neighborhood quality plays little role in determining a youth’s eventual earnings, unemployment likelihood, and welfare participation. • Several studies based on the Moving to Opportunity (MTO) project (Katz, Kling, Liebman and coauthors) • Beneficial effect on education, risky behavior and health for girls, but not for boys. • Ethiopian immigrants in Israel who were allocated (essentially randomly) to better schools had higher educational outcomes (Gould,Lavy,Paserman 2004).

4. This Study • Exploits the airlift of Yemenite immigrants to Israel in 1949 (Operation Magic Carpet) as a natural experiment to overcome the identification problem. • Basic idea: Yemenite immigrants were scattered across the country in an essentially random manner. • Results based on a survey of the entire population of those born in Yemen, immigrated between 0-5 years old, 56-61 years old in 2006. • Provides rare evidence on the very long-run effects of early childhood environment on an array of social and economic outcomes. • Relates to literature in development, urban economics, and the effects of immigrant enclaves.

5. Preview of Findings • Individuals who grew up in better conditions accumulated more human capital. • Married at an older age, had fewer children. • Less likely to be religious, more likely to be assimilated socially and culturally, but no effect on political views. • Weak evidence of an effect on health and employment outcomes. • Some evidence of an effect on the next generation’s educational outcomes. • Most of the significant effects are due to the effect on females rather than males.

6. Background

7. Background • A Jewish community has been present in Yemen since very ancient times. • With the rise of Islam, Jews were subject to the dhimma: protected by the state, but some restrictions on legal and social rights, and special taxes. • 20th century: mostly artisans and merchants, some farmers and land-owners. About one third in Sanaa area. • Initial trickle of migration to Israel in the first part of the 20th century. • Push for migration increases as Arab-Jewish relations deteriorate as a consequence of intensifying hostilities in Palestine.

8. Background

9. Operation Magic Carpet • Rescue operation to airlift the entire Yemenite Jewish community to Israel, between late 1948 and 1950, mainly at end of 1949. • By the end of the operation in early 1950, approximately 50,000 had been flown to Israel

10. Operation Magic Carpet • Uprooted from their traditional way of life to a modern society and culture. • The immigrants were dispersed throughout the country into 4 makeshift absorption camps. Duration of stay: up to one year. • For strategic reasons many were placed in areas where the population needed to be bolstered. • Many newly created agricultural communities (moshavim) built exclusively for Yemenite immigrants. • As a result, they were scattered across the country in a manner irrespective of their background.

11. Quasi-random allocation of immigrants to locations • Quasi-random allocation due to: • Homogenous background. • Complete culture shock. • Lack of understanding of spoken Hebrew. • Patronizing attitude of Ashkenazi establishment. • Reliance on Israeli bureaucrats to tell them where to live and what to do. • Overall chaotic and precarious situation of the entire country.

12. Data • Population of interest: all people born in Yemen in 1945-50 who migrated to Israel in 1948-51 (migrated as very young children). • Survey conducted between June and October 2006. Population between 56 and 61 years old: very much “long-term” outcomes! • Questions on: • Family background in Yemen. • Location of residence and living conditions upon arrival, and in subsequent two localities. • A variety of social and economic outcomes: employment, income, marriage, fertility, health, cultural tastes, and their children’s education

13. The survey • List of 5,776 names of people born in Yemen between 1945 and 1950. • Private company located phone numbers of 4,160 (72%). • 3,364 completed interviews. Approximately 10% discarded because immigrated before 1948 or after 1951. 2,991 completed surveys (>80% of those contacted.) • 264 re-interviews to establish childhood environment. • Final sample: 2,927 individuals. • 130 questions, ~20 minutes to complete.

14. The survey • Respondents were cooperative and knowledgeable. • They knew a great deal about their family background. • Information on family background in Yemen internally consistent. • Table 2: High socioeconomic status correlated with: • Father’s occupation: merchant (+), craftsman(-). • Owned land and livestock, hired employees. • Lived in a major city in Yemen. • Community or religious leader.

15. Methodology • Identify “childhood environment”: locality of residence, circa 1955. • Construct three summary measures of the childhood environment: • Whether the home had running water, sanitation and electricity. • Whether the locality of residence was in an urban environment with a good economic infrastructure. • Whether the locality of residence was a Yemenite enclave (a place built specifically for Yemenite immigrants).

18. Random assignment?

19. Random assignment?

20. Random assignment? • Family socioeconomic status is balanced with respect to childhood environment. • Some evidence that people from urban background in Yemen more likely to end up in urban environment in Israel. • Imbens ratios suggest that the differences are small (most IRs < 0.25). • Similar pattern of selection between boys and girls. • Likely that government officers responsible for assignment had similar set of information available to us. • Strategy: control for all observable family background characteristics, show that selection effect is modest.

21. Table 8: Estimates of the Effects of the Childhood Environment on Education Outcomes

22. Table 8: Estimates of the Effects of the Childhood Environment on Education Outcomes

23. Table 8: Estimates of the Effects of the Childhood Environment on Education Outcomes

24. Table 8: Estimates of the Effects of the Childhood Environment on Education Outcomes

25. The Effect of Childhood Environment on Education Outcomes • Strong evidence that the childhood environment affected educational outcomes for girls, but not for boys. • Result robust to using different measures of the childhood environment.

26. Mechanisms

27. Table 9: Estimates of the Effects of the Childhood Environment on Marriage and Fertility Outcomes

28. Table 10: Estimates of the Effects of the Childhood Environment on Health Outcomes

29. Table 11: Estimates of the Effects of the Childhood Environment on Employment Outcomes

30. Table 12: Estimates of the Effects of the Childhood Environment on Attitudes and Assimilation Outcomes

31. Table 13: Estimates of the Effects of the Childhood Environment on Children's Education Outcomes

32. Other outcomes • The effect of a good environment: • Marriage and fertility: higher age at first marriage, fewer children, more likely to be divorced (women only). • Health: No effect. • Employment: Women more likely to be employed. • Attitudes and assimilation: no effect on political attitudes, less religious (men and women), more cultural assimilation. • Children’s outcomes: some evidence that male boys are affected by the quality of the environment of the father.

34. Robustness checks • Results are similar when we condition also for an indicator of those whose childhood location was chosen by the government • Estimates are similar when based on the sample of those sent to childhood locations by the government • Estimates do not change at all when we include first the balanced characteristics and then the unbalanced ones • When allowing for interaction effects, the effect of the environment does not vary with background characteristics • No differences in the age distribution of men and women • Gender does not affect the probability of moving

35. Potential weaknesses • Survivor bias that leads to sample selection bias. Maybe people in worse environments didn't make it past childhood • Recollection bias, people who have better outcomes today may paint their initial environment brightly than what it really was. BUT it can go the other direction: those who have ‘succeeded’ might tend to emphasize how bad their initial conditions were

36. Why different effects for girls and boys? • Data from 1961 Census, able to identify location of residence in 1956. • 14-16 year old girls much less likely to be enrolled in school in rural localities built after 1948 for immigrants: 74% vs. 62%. • However, much more likely to be employed: 15% vs. 39%.

38. Why different effects for girls and boys? • Our interpretation: interaction of low benefits/high costs of schooling and cultural norms. • lifetime labor supply of women expected to be very low, especially in rural areas and ethnic enclaves where traditional cultural norms more likely to be enforced. • Costs of attending school are higher. • Conjectures: • in rural areas, boys wanted to attend religious schools  attended boarding school, could not help family with work. • Dowries. • Not consistent with: • Simple labor supply (wages higher in the city). • Substituting for mother’s work (mothers didn’t work, in either urban or rural areas). • Girls had poorer health in rural areas (does not explain why they are at work).

39. Conclusion • We have exploited the natural experiment provided by Operation Magic Carpet to study the long run effects of the childhood environment on social and economic outcomes. • High quality initial environment has a large positive effect on most women’s outcomes: education, marriage and fertility, employment, cultural assimilation. • Smaller or no effect for men.

40. Thank you!