The lasting health and income effects of public health formation in Sweden

Socio-economic inequalities are remarkable in contemporary developed countries, and continue to grow. The sources of these phenomena are not understood, and there is no agreement about at which part of an individual’s life they originate, whether in adulthood or in early childhood. The literature showing that health in infancy may be an important factor of later-life health and income trajectories is expanding, but empirical evidence is still scarce. This paper is the first to link individuals’ differences in access to better health care during infancy to income and health outcomes in old ages. Due to the public health care reform that became one of the first elements of the Swedish welfare state, gradually between 1890 and 1917, all rural areas established local health districts which implemented preventive measures with regard to the spread of the infectious diseases. Using administrative longitudinal population data and exploiting variation in the timing of the implementation of the reform across parishes, we examine whether treated individuals have advantages in old ages. Our findings indicate that treatment by the public health care in infancy leads to a significant reduction in mortality, with the largest effects among the cardiovascular diseases, and to an increase in individuals’ permanent incomes. The effects are universal across different subpopulations, with somewhat stronger responses among individuals from poor socio-economic backgrounds.