The Influence of Early-life Economic Shocks on Long-term Outcomes: Evidence from the U.S. Great Depression

We show that health and productivity around retirement age, and earnings over the
life cycle, vary with exposure to economic conditions in early life. Using state-yearlevel variation from the most severe and prolonged economic downturn in
American history—the Great Depression—combined with restricted micro-data
from the Health and Retirement Study, we find that changes in macroeconomic
indicators before age 6 are associated with changes in economic well-being,
earnings, metabolic syndrome, and physical limitations decades later. We also
document large declines in long-term mortality. Results are not driven by
endogenous fertility responses throughout the 1930s. Our results help inform the
design of retirement and healthcare systems and the long-term costs of business
cycles.