Childhood Health Shocks and the Intergenerational Transmission of Inequality

This paper documents a socioeconomic gradient in adult labor market penalties stemming from a single chronic and treatable childhood health shock in a country with universal access to health care. Using childhood onset type 1 diabetes, Danish administrative registry data, and causal forests, we estimate substantial variation in the employment and earnings penalties at age 30. These penalties vary systematically with parental income and maternal educational attainment. Our findings help explain the income-health gradient and have important implications for policy discussions related to the design of health care systems. (JEL H51, I12, I13, I18, J16, J23, J31)