Parental Chronic Illness and Child Welfare

Jules R. Elkins, University of Illinois at Urbana-Champaign

Many developing countries have begun to struggle with a double disease burden – they remain plagued by infectious disease, but these countries now also contend with the chronic diseases associated with longevity. However, the effect of chronic disease on households in developing countries has largely been overlooked in the literature. Chronic illnesses tend to be expensive, leading to concern about their effects on more vulnerable household members, particularly children. If parental investments in children decrease, there may be long-term effects on the child’s productivity and quality of life. In this paper, we estimate the effects of parental chronic illness on two measures of human capital investments in children – school enrollment and health care use. We use a panel dataset from Indonesia that combines excellent measures of health status and child human capital, which offers the opportunity to address some issues of endogeneity in the health-child investment relationship for which cross-sectional data is unsuited.