Early life circumstances and labor market outcomes over the life cycle
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Early life circumstances and labor market outcome over the life cycle Manuel Flores 1
2
& Pilar García-Gómez & Adriaan Kalwij
3
Received: 19 September 2016 / Accepted: 25 May 2020/ # Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract
Some consequences of adverse events early in life for labor market outcomes may emerge early and others only later in adult life. We use data from the Survey of Health, Ageing and Retirement in Europe to investigate how early life circumstances—childhood health and socioeconomic status (SES)—are associated with various labor market outcomes over an individual’s entire life cycle. Our main new finding is that these associations change significantly over the life cycle. For instance, the association of childhood SES with lifetime earnings is shown to become stronger over the life cycle and to operate through both working years and annual earnings. We discuss how our findings can explain some of the mixed evidence on these associations in previous literature. Our results also shed light on the potential gains in the different labor market outcomes of public policies that invest in children’s health and parents’ SES. Keywords Early life circumstances . Labor market . Lifetime earnings . Life cycle . SHARE JEL classification D10 . I14 . J14 . J24 . J31 . O15
Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10888-02009446-7) contains supplementary material, which is available to authorized users.
* Manuel Flores [email protected] Pilar García-Gómez [email protected] Adriaan Kalwij [email protected] Extended author information available on the last page of the article
M. Flores et al.
1 Introduction There is a growing literature that demonstrates that individuals’ early life circumstances have long-lasting effects on their later life health and socioeconomic status (SES)-related outcomes such as earnings and work effort (Almond and Currie 2011a; Almond et al. 2018; Black and Devereux 2011). However, to the best of our knowledge, there is no empirical study to date that has quantified how such early life circumstances relate to individuals’ earnings and other labor market outcomes over their entire life cycle. This is particularly worthy of investigation if some consequences of adverse events early in life may not become apparent until later in adult life, as predicted by the fetal origins hypothesis (Barker 1995; Almond and Currie 2011b), or if their impacts accumulate over the life cycle, as life course models suggest (Kuh and Wadsworth 1993). Therefore, studies that focus on a single age later in life―as is common in this literature―are likely to give an incomplete picture of the association between individuals’ early life circumstances and labor market outcomes over the entire life cycle.1 Our main contribution to the literature is, therefore, that we empirically investigate whether some of these associations show up early in adult life or at later ages, and whether they vanish or persist over the life cycle
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