Nancy Kong - Fatter Kids and the Shattered “Iron Rice Bowl”: Intergenerational Effects of Economic Insecurity During Chinese State-Owned Enterprise Reform

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Arezou Zaresani

azaresani@unimelb.edu.au

Title: Fatter Kids and the Shattered “Iron Rice Bowl”: Intergenerational Effects of Economic Insecurity During Chinese State-Owned Enterprise Reform

Abstract: Reform of the Chinese state-owned enterprise (SOE) sector in the late 1990s produced massive layoffs (34 million employees) and marked the end of the “iron rice bowl” guarantee of employment security. An expanding international literature has docu- mented the adverse health impacts of economic insecurity on adults, but has usually neglected children. This paper uses the natural experiment of SOE reform in China to explore the causal relationship between increased parental economic insecurity and children’s weight gain - as measured by BMI Z-score and waist-to-height ratio. Using provincial and year-level layoff rates and income loss from the layoffs, we estimate a continuous differences-in-differences model with individual fixed effects and year fixed effects. For a medium-built 10-year-old, a 10 percentage point increase in expected parental economic loss from layoff implies a gain of 4 kg for boys and a 10 cm gain in waist circumference for girls. These results persist even for boys whose parents kept their jobs, indicating the importance of anxiety about potential losses, as well as the experience of actual loss. Quantile regressions suggest that children who were already overweight were more severely affected by parental economic insecurity. Accounting for intergenerational effects therefore increases the estimated public health costs of greater economic insecurity.

Presenter: Nancy Kong, University of Queensland

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