The effects of children on households fixed and transitory wealth: - - PowerPoint PPT Presentation

The effects of children on households’ fixed and transitory wealth: Insights from a longitudinal study of peri-urban communities in Ghana and Ethiopia

Amy Tsui, Qingfeng Li, Johns Hopkins Bloomberg School of Public Health Julia Driessen, University of Pittsburgh School of Public Health Assefa Seme, Addis Ababa University School of Public Health Easmon Otupiri, Kwame Nkrumah University School of Public Health November 13, 2014, NTA10 Meeting, Beijing, China

Significance

• The fertility-human-capital tradeoff is a

compelling rationale for looking at population-age-structure effects on economic growth

• Measuring wealth at the household level

in developing countries remains challenging

• Micro-level evidence of the fertility-

human-capital tradeoff across different settings is desirable

100 200 300 400 500 600 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Human capital spending (% average annual income age 30–49) Total fertility rate (children per woman)

Africa South, Southeast Asia East Asia Europe, Australia, United States Latin America, Caribbean

NG ZA MZ SN KE

Fertility-human-capital tradeoff

Source: Andrew Mason/Ron Lee

Study aims

• To better understand the relationship

between the number and age composition of children and household fixed and transitory wealth

• To assess the influence of recent “shocks”

(new births, significant health expenditures)

• n these two types of household wealth

Hypotheses

• Households with higher fertility and

recent “economic shocks” will experience

• Less growth in transitory wealth

(measured by a consumption index)

• Less growth in permanent wealth

(measured by a fixed-asset index)

Source of Data:

Family Health and Wealth Study

Country Site Sample size

Egypt Waldeya 548 Ethiopia Sebeta 998 Ghana Asawasa 800 Malawi Lunzu 605 Nigeria Ipetumodu 787 Nigeria Akinyele 502 Uganda Wakiso 505 Total 4745

Peri-urban FHWS sites

Analytic approach

• Use longitudinal FHWS data for Ethiopia and

Ghana sites

• Construct permanent and transitory wealth indices

with PCA factor analysis

• Apply Round 1 (R1) factor score on Round 2 (R2)

values

• Adjust for potential bias from loss to follow-up with

weights based on propensity-score analysis

• Model asset outcomes at R2 and R1-R2 change

as function of

• Fertility, economic shocks
• Adjusted for baseline assets, male and female

partner’s education level, female partner’s age

Measurement of fertility effects

• Numbers of children under 5, children 5 to

14 and parity 4 or more

Measurement of economic shocks

• More than 10% of past year HH income spent
• n health care
• Births between R1 and R2
• Interaction between parity 4+ and recent births

Household wealth indices

Fixed Asset Index

• 43–48 items
• Home ownership
• Housing construction

materials

• Basic furnishings
• Water source, cooking

fuel type, toilet facilities, electricity availability Consumption Index

• 23–24 items
• Television
• Small electronics
• Cassette, tape
• Video recorder
• Cell phone
• Lifestyle expenditures
• Eating out
• Clothing
• Books, newspapers
• Child care, utilities

Index Ethiopia Ghana Fixed Asset Index Eigenvalue of component 1 4.80 3.37 % variance explained by component 1 10.0 7.8 Cronbach's alpha 0.768 0.719 Consumption Index Eigenvalue of component 1 3.27 3.05 % variance explained by component 1 13.6 13.3 Cronbach's alpha 0.641 0.558

PCA results for two wealth indices

Factor Adj OR p level Family income (Round 1/log) 1.011 0.011 Length of residence (husband) 0.997 0.687 Length of residence (wife) 0.988 0.199 Borrowed money last year for health expenses 0.609 0.051 Own house 0.619 0.010 Duration of marriage (wife report) 0.953 0.001 Regret marrying spouse (husband) 1.470 0.164 Regret marrying spouse (wife) 1.358 0.164 Husband has other wives (wife report) 1.265 0.543 Husband has other wives (husband report) 0.474 0.211

*Model also controls for occupation type of husband and wives (ns) n=950 couples, weighted for loss to follow up

Factors associated with couple loss-to-follow up (Ethiopia)

ROC (receiving operating characteristics) curve to assess propensity score

.25 .5 .75 1 Sensitivity .25 .5 .75 1 1 - Specificity

Area under curve = 0.6743 se(area) = 0.0196

1 2 3 4 Density .2 .4 .6 .8 Propensity Score Captured in 2nd round Missed in 2nd round

Closeness of curve to diagonal line is favorable to constructed propensity score model Distribution of propensity scores of those missed and relocated are similar (Ethiopia results only)

Means, standard deviations, and value ranges for model variables: Ghana and Ethiopia peri- urban settings

Variable Mean Std Dev Min Max Mean Std Dev Min Max R1 Asset Index 0.0001 1.838 ‐0.0155 7.1800 ‐0.0364 2.188 ‐3.5239 10.9147 R1 Consumption Index 0.0444 1.775 ‐1.4350 12.0390 ‐0.0158 1.819 ‐2.5828 13.1108 R2 Asset Index 0.0000 1.741 ‐4.0343 6.6679 0.0000 2.167 ‐3.5841 11.0066 R2 Consumption Index 0.0000 1.229 ‐2.3300 5.2238 0.0000 1.730 ‐2.7806 9.6401 R1_R2 Change in Asset Index ‐0.0001 1.587 ‐6.4448 6.3223 0.0364 1.104 ‐3.5840 11.0070 R1_R2 Change in Consumption Index ‐0.0444 2.058 ‐10.9300 6.3223 0.0160 0.829 ‐3.4707 3.5512 Male education in years in R1 6.89 3.96 24 8.96 4.65 20 Proportion with 10% or more of HH income last year spent on health care 0.028 0.165 1 0.131 0.337 1 Female education in years in R1 5.06 3.62 20 6.97 4.54 19 % with births between R1 and R2 0.245 0.431 1 0.131 0.337 1 Parity 4 or more in R1 0.405 0.491 1 0.193 0.395 1 # of children under 5 in R1 0.837 0.721 3 0.642 0.666 3 # of children age 5‐14 in R1 1.475 1.193 5 1.167 1.046 4 Wife's age in R1 33.66 6.29 18 44 29.01 6.32 16 44 Ghana (n=644) Ethiopia (n=742)

(1) (2) (3) (1) (2) (3) Variable Asset index R2 R1_R2 Change iR1_R2 Change Asset index R2 R1_R2 Change iR1_R2 Change R1 Fixed Asset score 0.583*** ‐0.417*** ‐0.420*** 0.780*** ‐0.220*** ‐0.217*** (0.032) (0.032) (0.032) (0.030) (0.030) (0.030) R1 Consumption score # of children under 5 in R1 ‐0.073 ‐0.073 ‐0.052 ‐0.113* ‐0.113* ‐0.121** (0.077) (0.077) (0.079) (0.060) (0.060) (0.060) # of children age 5‐14 in R1 ‐0.011 ‐0.011 0.035 0.052 0.052 0.042 (0.050) (0.050) (0.054) (0.039) (0.039) (0.039) Parity 4 or more in R1 ‐0.277* 0.057 (0.145) (0.130) 10% or more of HH income last year spent on health care 0.518 0.518 0.521 ‐0.127 ‐0.127 ‐0.136 (0.490) (0.490) (0.489) (0.162) (0.162) (0.163) # of births between R1 and R2 ‐0.120 ‐0.120 ‐0.129 0.167 0.167 0.141 (0.124) (0.124) (0.146) (0.136) (0.136) (0.141) Parity 4‐plus * Recent births ‐0.036 0.570* (0.272) (0.346) Female education in years in R1 0.002 0.002 0.001 0.044*** 0.044*** 0.046*** (0.020) (0.020) (0.020) (0.012) (0.012) (0.012) Male education in years in R1 0.066*** 0.066*** 0.064*** 0.026** 0.026** 0.025** (0.017) (0.017) (0.017) (0.012) (0.012) (0.012) Wife's age in R1 ‐0.001 ‐0.001 0.006 0.009 0.009 0.007 (0.010) (0.010) (0.010) (0.007) (0.007) (0.007) Constant ‐0.323 ‐0.323 ‐0.517 ‐0.774*** ‐0.774*** ‐0.719*** (0.351) (0.351) (0.366) (0.207) (0.207) (0.211) Observations 644 644 644 742 742 742 R‐squared 0.399 0.271 0.276 0.779 0.146 0.148 Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1 Peri‐urban Ghana Peri‐urban Ethiopia

Model results from OLS regressions for fixed asset index (permanent wealth)

Model results from OLS regressions for consumption index (transitory wealth)

(4) (5) (6) (7) (4) (5) (6) (7) Variable Consumption index R2 Consumption index R2 Consumption index R2 Consumption index R2 Consumption index R2 Consumption index R2 Consumption index R2 Consumption index R2 R1 Fixed Asset score 0.208*** 0.202*** 0.203*** 0.419*** 0.067*** 0.068*** (0.027) (0.028) (0.028) (0.039) (0.021) (0.021) R1 Consumption score 0.069** 0.031 0.031 0.788*** 0.741*** 0.740*** (0.030) (0.029) (0.029) (0.025) (0.024) (0.024) # of children under 5 in R1 0.068 0.051 0.062 0.056 0.131** 0.156* 0.126** 0.126** (0.074) (0.070) (0.070) (0.071) (0.053) (0.080) (0.051) (0.051) # of children age 5‐14 in R1 ‐0.012 ‐0.007 0.003 ‐0.011 0.050* 0.071 0.050* 0.045 (0.045) (0.048) (0.043) (0.048) (0.030) (0.047) (0.030) (0.030) Parity 4 or more in R1 0.087 0.091 0.177 0.070 (0.128) (0.128) (0.146) (0.093) 10% or more of HH income last year spent on health care 0.093 0.213 0.170 0.167 ‐0.150 ‐0.001 ‐0.144 ‐0.144 (0.247) (0.214) (0.220) (0.222) (0.104) (0.172) (0.102) (0.103) # of births between R1 and R2 0.012 ‐0.027 ‐0.041 ‐0.031 ‐0.037 ‐0.037 ‐0.035 ‐0.019 (0.116) (0.131) (0.113) (0.131) (0.108) (0.165) (0.108) (0.110) Parity 4‐plus * Recent births ‐0.013 ‐0.015 ‐0.218 ‐0.207 (0.243) (0.245) (0.536) (0.326) Female education in years in R1 ‐0.032* ‐0.038** ‐0.037** ‐0.036** 0.038*** 0.078*** 0.035*** 0.036*** (0.018) (0.017) (0.017) (0.017) (0.009) (0.013) (0.009) (0.009) Male education in years in R1 0.005 0.015 0.011 0.012 0.017** 0.041*** 0.013 0.013 (0.017) (0.016) (0.016) (0.016) (0.008) (0.013) (0.008) (0.008) Wife's age in R1 ‐0.006 ‐0.012 ‐0.009 ‐0.011 0.005 0.023*** 0.003 0.002 (0.010) (0.010) (0.009) (0.010) (0.005) (0.008) (0.005) (0.006) Constant 0.322 0.447 0.394 0.451 ‐0.675*** ‐1.774*** ‐0.561*** ‐0.535*** (0.366) (0.372) (0.353) (0.372) (0.164) (0.256) (0.167) (0.177) Observations 644 644 644 644 742 742 742 742 R‐squared 0.020 0.105 0.106 0.107 0.818 0.553 0.821 0.821 Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1 Peri‐urban Ghana Peri‐urban Ethiopia

Model results from OLS regressions for change in consumption index

(8) (9) (10) (8) (9) (10) Variable R1_R2 change R1_R2 change R1_R2 change R1_R2 change R1_R2 change R1_R2 change R1 Fixed Asset score 0.202*** 0.203*** 0.067*** 0.068*** (0.028) (0.028) (0.021) (0.021) R1 Consumption score ‐0.931*** ‐0.969*** ‐0.969*** ‐0.212*** ‐0.259*** ‐0.260*** (0.030) (0.029) (0.029) (0.025) (0.024) (0.024) # of children under 5 in R1 0.068 0.062 0.056 0.131** 0.126** 0.126** (0.074) (0.070) (0.071) (0.053) (0.051) (0.051) # of children age 5‐14 in R1 ‐0.012 0.003 ‐0.011 0.050* 0.050* 0.045 (0.045) (0.043) (0.048) (0.030) (0.030) (0.030) Parity 4 or more in R1 0.091 0.070 (0.128) (0.093) 10% or more of HH income last year spent on health care 0.093 0.170 0.167 ‐0.150 ‐0.144 ‐0.144 (0.247) (0.220) (0.222) (0.104) (0.102) (0.103) # of births between R1 and R2 0.012 ‐0.041 ‐0.031 ‐0.037 ‐0.035 ‐0.019 (0.116) (0.113) (0.131) (0.108) (0.108) (0.110) Parity 4‐plus * Recent births ‐0.015 ‐0.207 (0.245) (0.326) Female education in years in R1 ‐0.032* ‐0.037** ‐0.036** 0.038*** 0.035*** 0.036*** (0.018) (0.017) (0.017) (0.009) (0.009) (0.009) Male education in years in R1 0.005 0.011 0.012 0.017** 0.013 0.013 (0.017) (0.016) (0.016) (0.008) (0.008) (0.008) Wife's age in R1 ‐0.006 ‐0.009 ‐0.011 0.005 0.003 0.002 (0.010) (0.009) (0.010) (0.005) (0.005) (0.006) Constant 0.322 0.394 0.451 ‐0.675*** ‐0.561*** ‐0.535*** (0.366) (0.353) (0.372) (0.164) (0.167) (0.177) Observations 644 644 644 742 742 742 R‐squared 0.650 0.681 0.681 0.167 0.182 0.183 Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1 Peri‐urban Ghana Peri‐urban Ethiopia

Hypotheses

• Households with higher fertility and

recent “economic shocks” will experience

• Less growth in permanent wealth

(measured by a fixed asset index)

Supported in Ghana (but NS); supported (sig) in Ethiopia (children 0-4; high parity; parity*recent births) Recent health expenditures NS in Ghana; in Ethiopia

Hypotheses

• Households with higher fertility and

recent “economic shocks” will experience

• Less growth in transitory wealth

(measured by a consumption index)

Fertility effects are on R2 and R1_R2 change in consumption scores in both sites (NS in Ghana, sig in Ethiopia) Shocks’ effects are but NS in both sites

Summary

• Young children appear to inhibit growth in HH

permanent wealth

• Recent births, high parity and their interaction also

have negative coefficients

• Children 0–14 associated with increase in transitory

wealth (consumption index)

• Recent births, high parity and their interaction are

negatively associated

• Study limitations
• Generalizability
• Two time points
• Loss to follow-up
• Micro-level relationships for fertility-human capital

tradeoff have more “noise” but should continue to be investigated