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Long-Run Impacts of Early Childhood Poverty: Evidence from Norwegian Registry Data

Long-Run Impacts of Early Childhood Poverty: Evidence from Norwegian Registry Data. Greg J. Duncan Kjetil Telle Kathleen M. Ziol-Guest Ariel Kalil. Research Questions.

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Long-Run Impacts of Early Childhood Poverty: Evidence from Norwegian Registry Data

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  1. Long-Run Impacts of Early Childhood Poverty: Evidence from Norwegian Registry Data Greg J. Duncan Kjetil Telle Kathleen M. Ziol-Guest Ariel Kalil

  2. Research Questions • What are the long-run impacts of low income during childhood, net of correlated family factors surrounding a child’s birth on adult achievement? • Do these associations differ by the period of childhood income? • How do these associations compare between Norway and the U.S.?

  3. Background • Empirical studies suggest low-income children fare worse than higher income counterparts • Early childhood may be especially sensitive to environmental influences • Evidence of the specific role of income is limited to U.S. studies

  4. Contributions • Add to literature on adult impacts of low income very early in life • Use longitudinal data with very high-quality measures of income throughout childhood • Compare evidence from similar birth cohorts in Norway and the U.S.

  5. Norwegian-Specific Findings • Intergenerational earnings correlations lower in Scandinavia than in Anglo-Saxon Europe and the US (Bjorklund & Jantti, 2000) • Nevertheless, social disadvantage matters • Low income children more likely to become low-income earners (Bratberg et al. 2008) • Children of social assistance claimants more likely to claim social assistance (Lorentzen & Nilsen 2008) • Low childhood SES associated with increased mortality for most causes of death during young adulthood (Strand & Kunst, 2007) • Specific role of early income not yet established

  6. Norwegian Data and Sample(n=765,811) • Administrative register data compiled by Statistics Norway • All children born between 1968 and 1979 • Adult outcomes measured between ages 24 and as late as age 37 for the earliest cohort • Income measured prenatal to age 15; controls measured around or before birth • Adjust standard errors for presence of siblings

  7. U.S. Data and Sample(n=1,589) • Panel Study of Income Dynamics (PSID) • Children born between 1968 and 1975 • Adult outcomes measured between ages 25 and as late as age 37 for the earliest cohort • Use attrition-adjusted weights • Income measured prenatal to age 15; controls measured around or before birth • Adjust standard errors for the presence of siblings

  8. Childhood Income • Income measured in prenatal year to age 15 (total of 17 years) • Norwegian Registry (1998 Kroner) • Taxable income originating from the tax files • Child allowance transfers • Social Assistance transfers • U.S. PSID (2005 Dollars) • Taxable income • Cash transfers

  9. Adult Outcomes • Average annual adult earnings starting at age 24 • Average weekly (Norway) or annual (U.S.) hours worked • Years of completed schooling around age 24

  10. Norway 49% female 42% first born 1.96 average number of siblings Average age of mother at birth 26.32 Average education of father at birth 11.60 91% mothers married at birth U.S. 47% female 42% first born 2.21 average number of siblings Average age of mother at birth 24.84 Average education of father at birth 12.09 84% mothers married at birth Sample Description

  11. Norway Prenatal to age 5 $38,807 (17,408) Age 6 to age 10 $48,094 (21,094) Age 11 to age 15 $53,824 (27,146) U.S. Prenatal to age 5 $47,842 (28,340) Age 6 to age 10 $54,226 (39,012) Age 11 to age 15 $59,067 (45,369) Childhood Period Income(2005 USD)

  12. Norway $32,370 average annual earnings (2005 USD) 24.37 average hours worked per week (1267 annual equivalent) 12.91 years completed schooling U.S. $34,560 average annual earnings (2005 USD) 1892 average hours worked per year (37 weekly equivalent) 13.39 years completed schooling Adult Achievement Outcomes

  13. Annual EarningsStandardized Regression Coefficients

  14. Work HoursStandardized Regression Coefficients

  15. Years Completed SchoolingStandardized Regression Coefficients

  16. Analysis • Average annual income in various childhood periods • Prenatal to age 5 • Age 6 to age 10 • Age 11 to age 15 • Splines with knot at 120,000 Kroner and $25,000 • Allows for distinct linear effects for average incomes up to the knot and for incomes higher than the knot

  17. OLS Spline ModelAnnual Earnings (ln)

  18. OLS Spline ModelWork Hours

  19. OLS Spline ModelYears Completed Schooling

  20. Summary • Childhood stage matters in understanding links between childhood income and adult success, although not as much in the Norwegian as in the U.S. • Larger estimated impact of increments to low income early in childhood as compared with later periods in both datasets • Steeper income gradients for U.S. than Norwegian children

  21. Conclusions • Our results suggest evidence that the Scandinavian egalitarian welfare model helps mitigate the effects of disadvantaged family background • Nevertheless, provides supporting evidence to U.S. studies on the role of income in early childhood • Next steps: criminal charges, non-marital fertility, social assistance receipt

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