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The long term health and economic consequences of the 1959-1961 famine in China

The long term health and economic consequences of the 1959-1961 famine in China. Yuyu Chen, Li An Zhou. Why Matter?. Not a lot of studies have touched on the long term consequences for the C hinese survivors

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The long term health and economic consequences of the 1959-1961 famine in China

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  1. The long term health and economic consequences of the 1959-1961 famine in China Yuyu Chen, Li An Zhou

  2. Why Matter? • Not a lot of studies have touched on the long term consequences for the Chinese survivors • Important to understand to what extent famine exerted sustained effects on a large surviving populations • Good example of how to establish a study with information constraints and selective bias

  3. History • From 1959-1961 • The second 5-year-plan (Great Leap Forward) • 15-30 Million excess deaths • 30 million lost or postponed birth • Bad weather, excessive procurement by the state, delayed response to the food shortage, weakened incentive of production, massive industrialization

  4. Methodology: Sample selection • Adult residents in rural areas who were born in a range of years before and after the famine • Urban samples as control group • Reason: Rural residents were affected by the famine much more severely than the urban residents

  5. Limitations • Lack of data tracking the characteristics of population Sample Selection problem: • Fertility rate correlated to Socioeconomic status • Healthier parents • Only the strongest babies survived • Mobility

  6. Defence • Region of birth must be highly correlated with the region of growing up and residence • Severe restrictions on migration and relocation, harsh punishment on any attempt to flee • Communism! People were equally poor in the Leap Forward Movement! • Chinese culture: more children more happiness

  7. Methodology • Famine -> Health • Height as health indicator Reasons: • An important of health status of the individual • Malnutrition in early life may have a sustained effect on ultimate height • Easy to measure

  8. Methodology (1) • Hijk = C + Bk+ ∑k=1954-1962(EDRj x Birthik) + EDRj + errorijk • H: attained height (cm) by maturity or in 1991 for individual i, born in region j, in cohort k. • Bk : cohort fixed effects • EDRj : excess death rate of region j in 1960 • Birthik : dummy variable indicating whether individual i was born in the year k • Interaction measures causal effect on height

  9. Implication (1) • Famine -> negative impacts on the growth of survivors • 1959, 1960, 1962 1959 as an example: • When EDR increases by 1% • 0.185 cm lost in height • Average EDR: 16.4% • Therefore: 16.4% x 0.185 = 3.03cm lost

  10. Implication (1) • You may ask why 1961 coefficient = positive • Reasons: • Famine peaked at 1960 • Strongest babies survived • Selection Effect but inevitable bias

  11. Methodology (2) • Famine -> Health -> Labour Supply • Mental, cognitive development, physical strength • China = agricultural country • Total working hour = Farming + Home gardening + raising livestock+ fishing + Non-agrarian uses

  12. Methodology (2) • Log Lijk = C + Bk+ ∑k=1954-1962(EDRj x Birthik) + Xj+ errorijk • Log Lijk= log of total working hours in 1991 of individual i, born in region j, in cohort k • Xj= control variables such as schooling, age ,age squared, gender, family size, employment status, occupation and marriage

  13. Implications (2) • 1959, 1960 • EDR increased by 1%, 1959 cohorts LS dropped by 1.7%; 1960 cohorts LS dropped by 2.1% • Column 1 and 2 not consistent enough • Robust

  14. Methodology (3) • Annual working hours in home gardening now become the proxy of LS Reasons: • Intensive work • Demanding of physical strength and skill • More responsive to health

  15. Implications (3) • Compare the magnitudes of the effect between 2 and 3, marginal effects are larger ! • Hypothesis confirmed ! • But also interested in the effect of Income • Famine -> Health -> LS -> Y

  16. Methodology (4) • Now column 4-6 represent: log of annual per capita agrarian income, log of annual per capita farming income, log of annual per capita home gardening income • Column 7 represents: long term earningby measuring house space per capita • Reasons: House property most valuable assets, space of house is comparable, no information on prices of these goods when they were bought

  17. Implications (4) • All pointing to the same direction: • The famine cohorts, especially 1959-1960 in average obtain less income, regardless income in 1991 or annuity income !!! • Weak connection?

  18. Conclusion • Famine -> Health (Height) -> Labour Supply-> Less income (including annuity) • Missing mechanism: Famine -> Health capital and Labour Market outcomes -> individuals • Q & A • Thanks !!!

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