Health Shocks and Inter-Generational Transmission of Inequality

This study explores the inter-generational effects of health shocks using longitudinal data of Young Lives project conducted in the southern state of India, Andhra Pradesh for two cohorts of children (younger and older). It is found that health shocks to poorer parents reduce investments in human capital of children thereby reducing their future earnings, and perpetuating poverty and inequality. There is a temporary delay in primary school enrollment in the case of younger cohort, while schooling attainment is reduced by 0.26 years for older children. This paper further contributes to the literature on important dimensions like role of timing of the shocks and the pathways through which they affect human capital investment, differential effects of paternal and maternal shocks on different cohort groups, ability of the children and quality of schooling in schooling attainment.