A drop in wages caused by government spending cuts leads to an increase in the probability of stress-induced miscarriages – but the children who are eventually born are healthier than in normal times. These are among the findings of research on the health impacts of austerity by Andreea Mitrut and Simona Bejenariu, presented at the Royal Economic Society”s 2013 annual conference.
The authors study the health effects of the austerity measures taken by the Romanian government since 2010, which included a 25% cut in the wages of all public sector employees. Analysing all registered births in Romania over a three-year period, they find that the wage cut meant that:
Children were 17% less likely to be born with a low birth weight, indicating healthier and stronger newly born babies.
The improvement in health was registered for babies that were in an early development stage at the time of the economic ”shock”, but only for boys.
Fewer boys were born, with a live birth being 4.5% less likely to be a boy than during normal times.
The authors argue that these findings suggest a process of ”induced selection” in the womb. By increasing the probability of miscarriage of weaker male foetuses, the result was stronger but fewer survivors. The authors add: ”This indicates that the main channel through which children were affected was maternal antenatal stress”.
These results are relevant to the increasingly controversial austerity debate, particularly in emerging Europe. Pre-birth conditions that influence the development of the foetus are now well recognised to have an important effect on health at birth and on a wide range of outcomes in later life.
The authors comment:
”The effects of the Great Recession may be far more reaching than initially thought.
”In the light of our study and continued social unrest over austerity measures in Europe, policy-makers should consider that unexpected policy changes may act as sufficiently severe stressors with unexpected or unintended consequences.”
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The effects of the Great Recession may be far more reaching than initially thought. Austerity measures reducing wage income led to stronger newborn boys through what appears to be a natural selection process caused by early-pregnancy maternal stress, according to research by Andree a Mitrut and Simona Bejenariu presented at the Royal Economic Society”s 2013 annual conference.
The authors study the effects on the health outcomes at birth of children who were in utero at the time when their mothers incurred a significant and unanticipated wage cut, as part of the austerity measures taken in Romania in 2010. Analysing all registered births in Romania over a three-year period, they find that the 25% cut of the wage of all public sector employees had a significant effect on the health outcomes of affected newborns:
children had a 17% lower probability of being born with low birth weight, indicating better health at birth and stronger newborns;
the improvement of birth outcomes was observed for boys that were in an early developmental stage at the time of the shock, but not for girls;
fewer boys were born, with a live birth being 4.5% less probable to be a boy.
These findings suggest an induced selection in utero by increasing the probability of miscarriage of weaker male foetuses, resulting in stronger, but fewer survivors. This further indicates that the main channel through which children were affected was maternal antenatal stress.
In the current economic climate, when austerity measures are the first resort of policy-makers, the study draws attention to the fact that unexpected policy changes, especially those affecting household income, may act as severe stressors to the extent that selective foetal mortality has a large scope, even in developed economies where the baseline health is relatively high.
Antenatal conditions that influence the development of the foetus are now well recognised to have an important effect on health at birth and, subsequently, on a wide range of later-life outcomes. Economic conditions constitute a relevant source of shocks that may influence foetal development, and are especially important in the current turbulent economic climate.
This research evaluates the impact of an unanticipated and large wage cut on the health outcomes of children who were in utero at the time of shock. The main finding is that the cohorts affected in utero in early developmental stages have a better health at birth, and comprise fewer boys.
The authors study the effect on the health at birth of unborn children caused by the austerity measures taken in Romania in 2010 that entailed a 25% cut in the wages of all public sector employees. They compare children of pregnant women on the day of the policy announcement with children of pregnant women the same period a year before. The affected group, before and after the policy, consists of mothers employed in the public sector, and the comparison group consists of housewife mothers, unaffected by the policy, before and after.
The report finds evidence that exposed children have better health at birth reflected in a lower probability of being born with low birth weight, with the effect being entirely driven by healthier boys. They are on average 34% less likely to have a low birth weight, with the largest effect for boys that were in the first trimester of pregnancy, who had a 54% lower probability of low birth weight. In the same time, there are indications of a lower sex ratio at birth in the exposed cohort, a child being on average 4.5% less likely to be a boy.
The authors explore the alternative mechanisms through which the income shock could affect children”s health outcomes at birth, and conclude that the findings are supportive of the selection in utero hypothesis circulating in the medical literature. As such, weaker male foetuses are miscarried because of significant maternal stress during early pregnancy more often than female foetuses, resulting in stronger children being carried to term. This does not suggest that survivors were not affected by the income reduction, but that the positive selection effects were larger than the scarring, negative effects.
In the light of the findings of the study, placed in the context of continued European social unrest over austerity measures, policy-makers should consider that unexpected policy changes may act as sufficiently severe stressors with unexpected or unintended consequences.
”Save Some, Lose Some: Biological Consequences of an Unexpected Wage Cut” by Simona Bejenariu and Andreea Mitrut. Simona Bejenariu is at the University of Gothemberg. Andreea Mitrut is at Uppsala University and Uppsala Center for Labor Studies as well as the University of Gothemberg.
Simona Bejenariu
+46 736 948181 | simona.bejenariu@economics.gu.se
