Pollution, Ability, and Gender-Specific Investment Responses to Shocks
Speaker(s): Teresa Molina
Date: Thursday, 26 January, 2017
Time: 12:00-13:00
Venue: H12-30
Contact person(s): Teresa Bago d'Uva
Abstract
The long-term effects of early-life health shocks on later-life human capital are well-documented, but the reasons why men and women often respond differently to these shocks are less well-studied. Using data from Mexico, I show that exposure to pollution in the second trimester of gestation leads to significantly lower cognitive ability in adulthood for both men and women. For women only, however, this shock to cognitive ability also leads to lower high school completion and income. I identify two labor market features that explain why women adjust their schooling decisions more than men: (1) women sort into the white-collar sector at higher rates, and (2) schooling and ability are more complementary in the white-collar sector than in the blue-collar sector. I verify the higher degree of complementarity in white-collar jobs by structurally estimating the wage parameters for each sector, using a dynamic discrete choice model of education and occupational choice.