Life-Time Effects of the German Food Crisis: Earnings, Employment, and Retirement

Using German register data for the period between 1970 and 2010, this paper studies the labor market consequences of being born during the German food crisis after World War II. The paper finds that those born during the first half of 1946---about nine months after the period of most severe malnutrition---have significantly lower earnings than those born shortly before and after. The effect persists throughout their entire labor market careers, so that their total earnings losses accumulate to about one and a half year of average annual earnings. In addition, those affected by the malnutrition early in life have lower employment prospects and retire earlier. The paper provides novel insights to better understand how nutritional conditions early in life influence economic outcomes over the entire life course.