Maternal Stress and Initial Endowments: Evidence from a Financial Crisis

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In this paper, I estimate the causal effect of exposure to the stress associated with the collapse of the Icelandic economy during the fall of 2008 using data from the National Birth Register. Iceland experienced the deepest and most rapid financial crisis recorded in peacetime history when its three major banks all collapsed during the same week, triggering a systemic crisis, the first in any advanced economy. I use this sudden deterioration in economic conditions to capture the causal effect that financial stress had on the birth outcomes of the cohort in utero during the collapse. I also estimate how birth outcomes change with the business cycle in general, using data covering all births in the country over a 30-year period. My analysis shows that birth outcomes are affected by both sudden and smooth declines in economic conditions.
Original languageEnglish
Publication date2014
Number of pages23
Publication statusPublished - 2014
EventThe 26th EALE Conference 2014 - Faculty of Economics, University of Ljubljana, Ljubljana, Slovenia
Duration: 18 Sept 201420 Sept 2014
Conference number: 26


ConferenceThe 26th EALE Conference 2014
LocationFaculty of Economics, University of Ljubljana
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