Early Childhood Health and Schooling Attainment Gaps Within and Across Countries

Abstract

This paper develops a theory of human capital to investigate the role of early childhood health in explaining the large and persistent schooling gaps observed within and across countries. Quantitative analysis using the theory and data from 98 countries shows that early health inequalities within developingcountries strongly amplify later schooling gaps— counterfactually eliminating inequalities reduces schooling Ginis by an average of 18% in developing economies but has only mild effects in richer countries. Moreover, early health inequalities are found to be an important source of schooling variation across countries— universally equating early health to the average US level reduces the cross-country standard deviation of average schooling attainment by over 40%. Additional policy experiments reveal that the gains from early health interventions tend to be amplified by later educational investments in developing economies, while those targeting school-aged children may be limited if early health conditions are ignored.