Childhood Health and the Business Cycle: Evidence from Western Europe

We analyze the relationship between the business cycle and childhood health. We use a retrospective survey on self-reported childhood health for 10 Western European countries and combine it with historically and internationally comparable data on the Gross Domestic Product. We validate the self-reported data by comparing them to realized illness spells. We find a positive relationship between being born in and growing up during a recession and childhood health. This relationship is not driven by selection effects due to heightened infant mortality during recessions. As the business cycle is exogenous from the individual perspective, our results can be considered causal.