How does birth weight affect health and human capital? A short‐ and long‐term evaluation

In utero shocks have been shown to have long‐lasting consequences. However, we hardly know whether these effects tend to fade out over time and whether they can be compensated by post‐natal investments. This paper examines the effect of birth endowment over time by employing a long panel of individuals born in 1983 in Cebu (Philippines) that includes relevant information on the pregnancy. We build a refined health endowment measure netted out from prenatal investments. We find that initial endowments affect trajectories both through the human capital production function and subsequent parental investment. The effect of birth endowment remains until adulthood and the fading out is very limited for health outcomes but more pronounced for educational outcomes. We also find that parents tend to reinforce initial health endowments, but the effect of this behaviour has almost no effect on final outcomes.