”Health care for young children pays large social dividends”

Janet Currie

Economist Janet Currie explains why health insurance for children leads to better outcomes in adulthood.

Simon M. Sommer: The debate about repealing Obamacare has attracted worldwide attention. What will happen to the U.S. economy if large segments of the population, especially children, lose access to affordable health care?

Janet Currie: Actually the Affordable Care Act (aka Obamacare) mainly expanded health insurance for adults. Children had already been covered under a series of expansions of the Medicaid program that began back in the late 1980s. Most people do not know that 45% of births in the United States were paid for by public health insurance even before the ACA. New research has shown that these cohorts of children are healthier than slightly older children who were ineligible for Medicaid coverage. Not only that, they are less likely to be disabled, more likely to have gone to college, and have higher earnings. Hence, health care for young children pays large social dividends in terms of producing healthier and more productive adults.

The bill that was recently discussed in the U.S. Congress would not only have repealed Obamacare. It would also have threatened the older expansions of the Medicaid program by dismantling the federal program and giving “block grants” to the states to use to cover people as they chose.

SMS: You have shown that children’s mental health problems have strong negative effects on their attainment at school that extend well into adulthood. What action is needed to counter this problem?

JC: At this point we don’t really understand why there has been an increase in the incidence of diagnosed mental health problems among children or what to do about it. Although it seems a little lame for researchers to call for more research, that really is what is needed at present.

SMS: What might be the causes of these mental health problems?

JC: For example, an interesting hypothesis is that the spread of internet and cell phone access among young children has had negative impacts on their mental health by exposing them 24/7 to images, content, and social networks beyond the control of their caregivers. Another hypothesis is that stress due to material deprivation can cause mental health problems in parents and children. But at this point we just don’t know for sure. Also, in terms of treatment, many children are receiving drug therapy, but we have little information about whether this is helpful or harmful, and to whom.

SMS: On the Child and Family Blog, Michael Meaney observed that “childhood mental illness is the new polio“ and that “[biological] tests could soon spot susceptibility before a single symptom is manifest – even in babies. Many childhood mental illnesses could, like polio, soon cease to be unpredictable mysteries. Mental ill-health, once anticipated, could then be alleviated dramatically.” What do you think about such an optimistic view?

JC: This is of course the dream – to be able to spot predictors of mental illness and intervene to prevent it. It may be a bit simplistic to think though that we can prevent mental illness as we prevent polio – with a simple vaccination. The things that we currently think of that help to prevent mental illness, like supportive families and adequate resources, are hard to guarantee through public policy. And we currently see many people with mental illness who grew up in fine circumstances but are sick nevertheless. At present, we already know that people with a strong family history of mental illness are at risk, but is has not proven easy to intervene to prevent mental illness in this population.

“The things that we currently think of that help to prevent mental illness, like supportive families and adequate resources, are hard to guarantee through public policy.”

SMS: What can a government do to help improve child welfare and prevent mental and other health problems?

JC: Research over the past 25 years has shown that there are a broad range of programs that improve children’s health and wellbeing. Health insurance for children has positive effects as discussed previously. The Earned Income Tax Credit (similar to the UK Working Tax Credit) has also been shown to improve the health and schooling attainment of poor children. There is a lot of evidence that high quality preschool can also benefit disadvantaged children.

SMS: Greg Duncan has recently suggested introducing direct and unconditional cash transfers to low-SES American families. Would such a “European” social welfare state approach work in the U.S.?

JC: Yes I think so. When people say that you can’t solve poverty by “throwing money at the problem” I like to point out that the U.S. effectively did just that with the elderly. We raised social security payments and gave everyone generous health insurance and the problem of poverty among the elderly largely went away. The same approach could work with children with one caveat which is that while the majority of parents have their children’s best interests at heart, there are some parents who do not, or are incapable of looking after children. Therefore, there will always be a need for some state intervention with some children.

“When people say that you can’t solve poverty by ‘throwing money at the problem’ I like to point out that the U.S. effectively did just that with the elderly.”

SMS: In an article published in 2014, you raised the question of whether research can provide more evidence on how early-life exposure to pollutants affects not only health, but also other important economic outcomes such as education, labor force participation, and earnings. What is the evidence base today, three years later? Do we know more about the long-term effects of early exposure to pollution on health, but also on outcomes?

JC: Two of my former students, Maya Rossin-Slater and Reed Walker have a paper forthcoming in the Journal of Political Economy that examines this exact question. They use data on prime age workers that has been linked to information about where the workers were born. Using this information they can infer whether the workers were affected in childhood by air quality improvements mandated under the Clean Air Acts. They find that children who benefited from cleaner air were more likely to be employed as adults and had higher wages. It is so exciting to see this research agenda moving forward.

SMS: Please tell us something about your current work, which you describe in an article entitled “Are Publicly Insured Children Less Likely to be Admitted to Hospital than the Privately Insured (and Does it Matter)?

JC: In this paper we examine children who go to the emergency room because of asthma. Asthma is the most frequent cause of hospitalization among young children. The question is whether the child will be admitted to hospital or not. We show that when the hospital is crowded (because of many flu cases among older people), children with public insurance are less likely to be admitted than children with private insurance. However, the twist is that this differential in hospitalizations does not appear to matter—we find no evidence that the children who were “turned away” suffer. What this suggests is that perhaps too many of the privately insured are being hospitalized rather than too few of the publicly insured.

Janet Currie is the Henry Putnam Professor of Economics and Public Affairs at Princeton University, the chair of Princeton’s Economics Department, and the co-director of Princeton’s Center for Health and Wellbeing. Her research focuses on health and wellbeing, especially of children. In more than 130 publications, she advanced the field of child development, establishing the role of early life intervention programs, programs to expand health insurance and improve health care, public housing, and food and nutrition programs. Her current research focuses on socioeconomic differ­ences in health care, environmental threats to health, and mental health.

On Saturday, April 29, 2017, Janet Currie will receive an Honorary Doctorate from the University of Zurich, Switzerland, as part of the University’s Dies academicus festivi­ties.