Scandinavian Working Papers in Economics
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Department of Economics, Uppsala University Working Paper Series, Uppsala Center for Labor Studies, Department of Economics, Uppsala University

No 2012:5:
Austerity Measures and Infant Health. Lessons from an Unexpected Wage Cut Policy

Simona Bejenariu () and Andreea Mitrut ()

Abstract: We investigate the effects on health at birth of a shock generated by a major (25%) and unexpected wage cut austerity measure that affected all public sector employees in Romania in 2010. Our findings suggest an overall improvement in health at birth for boys exposed to the shock in early gestation and a decreased sex ratio at birth among early exposed children. These findings are consistent with the selection in utero theory hypothesizing that maternal exposure to a significant shock early in gestation preponderantly selects against frail male fetuses, with healthier survivors being carried to term.

Keywords: austerity measures; fetal shock; health at birth; selection in utero; Romania; (follow links to similar papers)

JEL-Codes: I19; I38; J13; J38; (follow links to similar papers)

67 pages, February 2, 2012, Revised October 10, 2013

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