While much attention has been paid to how inherited traits such as skin tone or height influence economic success, a groundbreaking new study from the Journal of Political Economy argues that it is a malleable characteristic - in utero health - that most strongly indicates how well a child will fare in adulthood.
This study has important implications for public policy, suggesting that programs targeting early-life health have higher returns for reducing racial disparities in socioeconomic outcomes than more traditional investments, including schooling.
"The key distinction for policy purposes is that whereas heredity is immutable, congenital characteristics are mediated by the prenatal environment. This strongly suggests that economic outcomes are malleable in a way not widely recognized and therefore subject to improvement," explains Douglas Almond (Columbia University).
Detecting delayed effects is inherently difficult, and Almond ingeniously utilizes census microdata from three decades - including not only birth year, but birth quarter - to analyze the adult economic outcomes of those exposed in utero to the 1918 influenza pandemic. Twenty-five million people in the United States contracted influenza during the 1918 pandemic and survived. The pandemic struck without warning and lasted only a few months, meaning that those born a few months apart had markedly different in utero conditions. Additionally, the severity of the pandemic varied widely and idiosyncratically across states with little in common economically, demographically, climatically, or geographically.
"The 1918 influenza pandemic provides an exceptional opportunity to evaluate effects of prenatal environment using U.S. census data," writes Almond. "Some of the highest infection rates were observed among women of childbearing age, one third of whom contracted influenza."