16 June 2021

Health Meets Public Economics

CEBI researchers Torben Heien Nielsen, Miriam Wüst and Asger Lau Andersen to present their findings on CEPR Public Economics Annual Symposium on 23 - 24 June, 2021

The goal of the symposium is to provide a forum for high-quality work in public economics and to bring together economists in the field from across Europe as well as key researchers from outside the region. This year, the theme of the symposium is “Health Meets Public Economics.”

The CEBI presentations are:

Early Career, Life-cycle Choices and Gender, Torben Heien Nielsen

Do early labor market experiences determine longer-run life and career outcomes, and do they operate differentially for males and females? We study this question in the context of the physician labor market by exploiting a randomized lottery that determines the sorting of Danish physicians into internships, where students with bad lottery numbers end up assigned to less desirable local labor markets and entry-level jobs. Using administrative data that span up to ten years after physicians’ graduations, we study key decisions that determine their longer-run life trajectories. We find causal effects of early-career labor market sorting on a range of life-cycle outcomes that cascade from longer-run labor market sorting, to human capital accumulation, to occupational choice, and even to fertility. Notably, we find that the persistent longer-run effects are entirely driven by females, whereas males experience only temporary career disruptions from unfavorable early-stage sorting. The gender divergence is unlikely to be explained by preferences over entry-level markets, but differential family obligations, and mentorship appear to play operative roles. Our findings have implications for policies aiming at outcome-based gender equality, as they reveal how persistent gaps can arise even in an institutionally gender-neutral setting with early-stage equality of opportunity.

Beyond Treatment Exposure - The Impact of the Timing of Early Interventions on Child and Maternal Health, Miriam Wüst,

This paper studies the impact of the timing of early-life investment policies on child and maternal health. We exploit variation induced by a 2008 Danish nurse strike that resulted in a large-scale cancellation of home visits for families with infants. Combining unique nurse records with administrative data, we show that missing the first but not later visits increases child and mother contacts to health professionals and the probability of maternal mental health issues. We show that likely mechanisms for these results include nurses’ focus on timely maternal mental health screening and information provision to new families.

Household Debt and Mental Health, Asger Lau Andersen,

We show negative effects of household debt on mental health exploiting administrative matched datasets from Denmark. Individuals with higher ex-ante leverage suffer substantially more mental health problems upon an adverse shock. Oster test and IV strategy suggest that omitted variable problems do not drive the findings. Consistent with a debt mechanism, loan arrears are much higher after the adverse shock and effects are stronger in crisis times. Further, upon the adverse shock, all individuals suffer similar reduction in earnings, but over time - consistent with loan arrears and mental problems kicking in income reduction is stronger for individuals with higher ex-ante leverage.

You can read more about the event and see the full program here