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Three essays on gender inequalities, human capital and development in Guatemala

ProQuest Dissertations and Theses, 2009
Dissertation
Author: Maria Cecilia Calderon
Abstract:
This dissertation investigates micro relations between certain components of human capital and economic and welfare outcomes in Guatemala, a developing country with high levels of malnutrition and large gender inequalities. Three chapters contribute to the analysis. First, 'High quality nutrition in childhood, body size and wages in early adulthood: Evidence from Guatemalan workers' focuses on the mechanisms through which a high quality diet during childhood affects wages in early adulthood. Three main results emerge: (1) the causal effect, i.e. when unobserved heterogeneity is taken into account, of health on wages is positive; (2) such a causal effect is larger than the simple association; and (3) evidence is stronger for this effect for males than for females. In addition, this work estimates a set of unbiased returns to nutrition across the conditional wage distribution. Second, 'Nutritional supplementation of girls influences the growth of their children: Prospective study in Guatemala' focuses upon the impact of improved child nutrition for mothers on next-generation growth and development. Three key results emerge: (1) exposure to a nutritional supplement for mothers, but not for fathers, has significant intergenerational associations beyond previously documented associations in their own lives (e.g. chapter one), (2) nutritional supplementation of mothers is associated with substantial increases in their offspring birth weight, height, head circumference, height-for-age z score and weight-for-age z score, (3) maternal supplementation was not associated with other offspring anthropometric indicators that reflect measures of adiposity. Finally, 'Discrimination, marital bargaining power and intrahousehold allocation in Guatemala: A decomposition', explores gender differences inside marriage. The major result suggests that household food expenditure shares would increase if there were no differences in the bargaining power of wife and husband. Data on the population analyzed come from a nutritional supplementation trial conducted by the Institute of Nutrition of Central America and Panama (INCAP) between 1969 and 1977, the INCAP Longitudinal Study 1969-77, and subsequent follow-ups in 2002-04 and 2006-07. Based on the results in this study, policy interventions should target: (1) the improvement of the nutritional status of the Guatemalan population, and (2) the promotion of gender equality and female empowerment.

TABLE OF CONTENTS Preface - x Chapter 1: 'High quality nutrition in childhood, body size and wages in early adulthood: Evidence from Guatemalan workers' - - 1 1. Introduction - - - 3 2. Conceptual framework 9 3. Methods - -— 13 3.1 Consistent estimator — 13 3.2 Heterogeneity in marginal effects — 14 3.3 Combining Instrumental variables (IV) and Quantile regression (QR) 15 3.3.1 Quantile regression 15 3.3.2 Two-step quantile regression 16 4. Data - - -- 18 5. Results - ----- 23 5.1 Non-parametric approach 23 5.2 Parametric approach 25 6. Conclusions and further extensions 29 7. Variable definitions - 30 References — — — 32 Chapter 2: 'Nutritional supplementation of girls influences the growth of their children: Prospective study in Guatemala' 48 1. Introduction 51 2. Subjects and methods — 51 3. Ethics 54 4. Statistics - - 55 5. Results - - 55 6. Discussion ~ — - - - 58 References - — 64 Supplemental material — 72 Introduction 72 Basic results (Appendix Tables T2-T3) 72 Variants of Table 2 estimates and robustness checks for basic results 73 Conclusions — — - — 77 References 78 Chapter 3: 'Discrimination, marital bargaining power and intrahousehold allocation in Guatemala: A decomposition' 103 1. Introduction — — 105 v

2. Theoretical framework - 109 3. Guatemalan context - 115 4. Data and Methods - 116 5. Results 135 6. Conclusions and further extensions - 142 References - 145 Conclusions — 160 VI

LIST OF TABLES Chapter 1 Table 1 37 Table 2 - —- 3 8 Table 3 39 Table 4 - 40 Table 5 - - 41 Table 5B -- - 42 Table 6- - -- 43 Table 6B - - 44 Chapter 2 Table 1 - — 68 Table 2 - 69 Table 3 - -- - 70 Supplemental material Table Tl A - 79 Table T2 A 80 Table T3 A — 81 Table T2 B - - - —-— -- 82 Table T2 a - - 83 Table T2 b 84 Table T2 c - - - 85 Table T2 d - 86 Table T2 e --- - -- ----- 87 Table T2 f - - 88 Table T2 g 89 Table T2 h — - 90 Table T2 i — 91 Table T2 j 92 Table T2 k — 93 Table T2 1 - - — — 94 Table T2 m - 95 Table T2 n - - 96 Table T2 o 97 Table T2 p 98 Table T2 q ----- - 99 Chapter 3 Table 1 - 151 Vll

Table 2 - - - — 151 Table 3 -.---— - - - — 152 Table 4 - - 153 Table 5 - 154 vin

LIST OF ILLUSTRATIONS Chapter 1 Figure 1 — - - 45 Figure 2 45 Figure 3 45 Figure 4 - - 45 Figure 5 — - 46 Figure 6 - — 47 Figure 7 — 47 Figure 8 — 47 Figure 9 - 47 Chapter 2 Figure 1 — - - — 71 Supplemental material Supplemental material figure — 102 Chapter 3 Figure 1 — - - 155 Figure 2 - — - - 156 Figure 3 —- - 156 Figure 4 - 156 Figure 5 ~ - — 157 Figure 6 — 157 Figure 7 157 IX

PREFACE The purpose of this dissertation is to investigate some fundamental micro relations between critical components of human capital (i.e. health, nutritional status, and other accumulation of assets) and economic outcomes (i.e. labor productivity, offspring health and growth, household expenditures) within the context of Guatemala, a developing country with large gender inequalities in, among other variables, income, schooling and land tenure. The United Nations claims that people can achieve more productive lives and enhance their well-being as well as contribute to their country's economic growth and development when gender differentials are lessened allowing for a more efficient use of human and economic resources (United Nations Millennium Project 2005). Guatemala, one of the least developed countries in Latin America, is characterized by its high level of poverty, malnutrition, stunting, and large gender inequalities. In fact, 56.2% (74.5%) of the (rural) population lived below the national poverty line in 2000, 23% of the population were undernourished (below minimum level of dietary energy consumption) and 22.7% of children under five were moderately or severely underweight for their age in 2002 (United Nations Millennium Development Goals Database 2008 update). Moreover, chronic malnutrition among Guatemalan children is the highest in Latin America and among the highest in the world (Marini and Gragnolati 2003). For instance, the stunting rate1 for Guatemalan children aged less than five years is 52.8%2, which is not only the largest in Latin America, but places Guatemala as an outlier within the region (Van de Poel et al 2008). This means that more than half of the children under five years show evidence of linear growth retardation, a concern that is accompanied by serious consequences over the life cycle. Childhood stunting is a strong predictor of short stature, reduced lean body mass, less schooling, diminished intellectual functioning, and ' Percentage of children with height-for-age z score less than -2. 2 Calculated using the WHO growth standards. X

reduced wage rates in adulthood (Alderman and Behrman 2006, Hoddinott et al 2008, Maluccio et al 2009, Victora et al 2008). Relatedly, the Human Development Report 2008 shows that Guatemala has the lowest Human Development Index (HDI) in the Latin American region, positioning 121 from among 179 countries world-wide. Moreover, the Gender-related Development Index (GDI)3, which captures inequalities in achievement between women and men, ranks the country 105th from among 157 countries (UNDP 2008). An exploration of gender issues in Guatemala requires particular attention. Women may still face different forms of discrimination, including lower wages, limited rights to control income, allocate household resources and own property. Even though gender equality in nutrition, health, education and labor markets, among other variables, are human rights universally promoted in the Millennium Development Goals (MDG) (United Nations Millennium Declaration, 2000), in Guatemala this target has not been widely achieved and disparities between women and men still exist. World Bank research argues that discriminatory attitudes in the access to health, labor markets and education against women waste human capital through the inefficient use of individual capacities and, therefore, reduce the contribution of women and undermine the effectiveness of development policies (World Bank, 2001). Also, a growing body of empirical evidence in developing countries shows that women can improve their opportunities and earning power when such detrimental practices are removed, or at least narrowed, and the society grows and benefits as a whole. Moreover, empowered women can help increase their offspring's human capital development through their influence upon their children's health, nutritional status and growth. This intergenerational transmission of human capital is the core of this dissertation 3 The GDI measures achievements using the same indicators as the HDI (life expectancy at birth, adult literacy rate, enrolment ratio in education and GDP per capita); GDI is simply the HDI adjusted downward for gender inequality. XI

because it represents a fundamental pathway by which economic advantage or poverty is perpetuated over time. The rest of this introduction briefly describes the three main chapters of this dissertation followed by a short explanation of the data source and some general conclusions that emerge from the broad analysis. The first chapter, 'High quality nutrition in childhood, body size and wages in early adulthood: Evidence from Guatemalan workers', focuses on the mechanisms through which a high quality diet during childhood affects wages in early adulthood, with particular attention to worker and gender disparities. This work improves prior research on this topic because it uses a rich data set that allows to better control for endogeneity. Three main results emerge: (1) the causal effect, i.e. when unobserved heterogeneity is taken into account, of health on wages is positive; (2) such a causal effect is larger than the simple association; and (3) evidence is stronger for this effect for males than for females. In addition, this study extends earlier research by estimating a set of unbiased returns to nutrition across the conditional wage distribution (not only the average effect). The second chapter, 'Nutritional supplementation of girls influences the growth of their children: Prospective study in Guatemala', focuses upon the impact of improved child nutrition on next-generation growth and physical development, a topic where high quality evidence is scarce. This is a joint study with Jere Behrman, Samuel Preston, John Hoddinott, Reynaldo Martorell and Aryeh Stein where we use quasi-experimental data from Guatemala to investigate the impact of early life nutritional supplementation for women on eleven anthropometric indicators of their offspring under twelve years of age: birth weight, height, weight, BMI, head and arm circumferences, triceps and subscapular skinfold thicknesses, and height-for age, weight- for-age and BMI-for-age z scores. We find three key results: (1) exposure to the nutritional supplement for mothers, but not for fathers, has significant intergenerational associations beyond previously documented associations in their own lives (e.g. chapter one of this dissertation), (2) xii

nutritional supplementation of mothers is associated with substantial increases in their offspring birth weight, height, head circumference, height-for-age z score and weight-for-age z score, (3) maternal supplementation was not associated with six other offspring anthropometric indicators that reflect measures of adiposity. The height result deserves special consideration in a setting where the population shows strong evidence of linear growth retardation. Our results are robust to a wide range of sensitivity tests, including (but not limited to): (1) alternative approaches to computation of standard errors, (2) possible pathways for effects such as mother's height and schooling attainment, (3) paternal height, (4) children's birth weight, (5) children's birth order, (6) parental family background including socioeconomic status and grandmaternal height, and (7) adjusting for village characteristics. Finally, the third chapter, 'Discrimination, marital bargaining power and intrahousehold allocation in Guatemala: A decomposition', explores some impacts of gender differences inside marriage. The aim is to measure the effects of wife's relative (to husband's) marital bargaining power, captured by schooling attainment, age and physical assets at the time of union, upon household expenditure shares in food, education and health. The data show that, on average, husbands bring more assets, are better educated and marry when older than wives. Furthermore, I simulate the intrahousehold expenditure share distribution that would have been observed in the absence of differences between spouses. This results in an increase of household food expenditure shares, a finding that is consistent with the previously documented evidence that mothers and children do better when women control a larger proportion of family resources4 (Lundberg, Pollak and Wales 1997). The most important implication of this result is related to the design of public policies: there is a potential gain for women and children from promoting gender equality and female empowerment, particularly for poor women5. 4 See Conclusions at the end of the three chapters for a deeper analysis of this topic. 5 While the population in the data used in this dissertation is of ladino heritage (mixed Spanish-American) and live in rural settlements, other studies (e.g. Gaia 2009) present evidence that the indigenous population is also in adverse circumstances. xiii

Even though each main chapter describes its data source and included sample, it is advantageous to briefly introduce the unique source of information that this dissertation analyzes. Data on the population explored in the three chapters come from a nutritional supplementation trial conducted by the Institute of Nutrition of Central America and Panama (INCAP) between 1969 and 1977, the INCAP Longitudinal Study 1969-77, and subsequent follow-ups, the Human Capital Study 2002-04 and the Intergenerational Study 2006-07. Four rural villages in the Department of El Progreso in Eastern Guatemala6 were randomized to receive a nutritional supplementation: two villages received atole, a high calorie and high protein drink, and the other two received fresco, a low calorie and no protein beverage. The original study included all children seven years and younger at that time and all children born thereafter until the end of the study in 1977. These original children were followed over time and during the 2002-04 data collection they were between twenty five and forty two years of age. The most recent follow-up in 2006-07 gathered information on the original sample members who were between twenty eight and forty seven years old, their parents, spouses and children. These three chapters, as synthesized in the conclusions at the end, shed some light on the links between childhood development and outcomes later in life or across generations that are perceived to be of considerable importance. The conclusions, therefore, have considerable value in terms of informing policy and interventions designed to empower women and improve child welfare in order to break the intergenerational transmission of poverty and inequality and enhance the economic and human development of Guatemalans. 6 See Chapter 3, Figure 1. XIV

REFERENCES Alderman, Harold and Jere Behrman 2006. Reducing the incidence of low birth weight in low- income countries has substantial economic benefits. World Bank Res Obs 2006; 21: 25-48. Gaia, Elena 2009. Mi Familia Progresa: Change and Continuity in Guatemala's Social Policy, paper presented at the Social Policy Association Conference 2009 "Policy futures: learning from the past?" Edinburgh, Scotland, 29 June-1 July 2009. Hoddinott, John, John Maluccio, Jere Behrman, Rafael Flores and Reynaldo Martorell 2008. The impact of nutrition during early childhood on income, hours worked, and wages of Guatemalan adults. Lancet 2008; 371: 411-416. Lundberg, Shelly, Robert Pollak, and Terence Wales 1997. Do husbands and wives pool their resources? Evidence from the United Kingdom Child Benefit, Journal of Human Resources, 32: 463-480. Maluccio, John, John Hoddinott, Jere Behrman, Agnes Quisumbing, Reynaldo Martorell and Aryeh Stein. The impact of nutrition during early childhood on education among Guatemalan adults. Economic Journal 2009; 119: 734-763. Marini, Alessandra and Michele Gragnolati 2003. Malnutrition and Poverty in Guatemala, The World Bank, Latin America and the Caribbean Region, Human Development Sector Unit, January 2003. UNDP 2008. Human Development Indices A statistical update 2008. United Nations Development Programme, 1 UN Plaza, New York, NY 10017, USA. United Nations Millennium Declaration, 2000. http://millenniumindicators.un.org/unsd/mdg/Host.aspx?Content=/Products/GAResolutions United Nations Millennium Development Goals Database 2008 update. Accessed online on July 14, 2009 at http://mdgs.un.org/unsd/mdg/News.aspx?ArticleId=40 United Nations Millennium Project 2005. Investing in Development: A Practical Plan to Achieve the Millennium Development Goals: Overview, Box 5, p. 32. Report to the Secretary-General. London and Sterling, Virginia: Earthscan. Van de Poel, Ellen, Ahmad Reza Hosseinpoor, Niko Speybroeck, Tom Van Ourtia & Jeanette Vega 2008. Bulletin of the World Health Organization, April 2008, 86 (4). Victora, Cesar, Linda Adair, Caroline Fall, Pedro Hallal, Reynaldo Martorell, Linda Richter, Harshpal Singh Sachdev. on behalf of the Maternal and Child Undernutrition Study Group 2008. Undernutrition 2: Maternal and child undernutrition: Consequences for adult health and human capital. Lancet 2008; 371: 340-357. World Bank, 2001. Engendering Development: Through Gender Equality in Rights, Resources, and Voice, pp. 33, 35, 74, and 99. New York and Washington, D.C.: Oxford University Press and the World Bank. xv

CHAPTER 1 HIGH QUALITY NUTRITION IN CHILDHOOD, BODY SIZE AND WAGES IN EARLY ADULTHOOD: EVIDENCE FROM GUATEMALAN WORKERS

HIGH QUALITY NUTRITION IN CHILDHOOD, BODY SIZE AND WAGES IN EARLY ADULTHOOD: EVIDENCE FROM GUATEMALAN WORKERS MARIA CECILIA CALDERON1 ABSTRACT Establishing a causal relationship between health and productivity is not straightforward. On one hand, higher income individuals invest more in health: as their income grows, they invest in better diets and health care. On the other, if a worker is healthier and more energetic, then she will probably be more productive. This paper focuses on the second pathway and examines the effect of body size, height and body mass index (BMI), as indicators of the nutritional status on wage rates and annual earnings. Data comes from a longitudinal study conducted in four rural villages in Guatemala during 1969-77 and followed-up in 2002-04. Returns to body size, in the form of height and BMI elasticity, increase when unobserved heterogeneity is taken into account but evidence is stronger for males than for females. In addition, estimates show some degree of heterogeneity of height and BMI elasticity at different quantiles of the conditional wage distribution. Key words: Health; Height; BMI; Wages; Guatemala; Quantile. JEL classification: HA; 112 1 Maria Cecilia Calderon, Population Studies Center, University of Pennsylvania, Philadelphia, PA. E-mail: cmaria@sas.upenn.edu. Paper presented at the Annual Meeting of the Population Association of America, March 29-31, 2007, New York, NY. This paper has benefited from the valuable comments of Jere Behrman, Sebastian Galiani, John Hoddinott, Hans-Peter Kohler, Scott McNiven, John Maluccio, Reynaldo Martorell, Sam Preston, Manuel Ramirez, Erica Soler-Hampejsek, and Aryeh Stein. The usual disclaimers apply. This research was conducted with support from the NIH/Fogarty grant TW-05598 on "Early Nutrition, Human Capital and Economic Productivity," NSF/Economics grants SES 0136616 and SES 0211404 on "Collaborative Research: Nutritional Investments in Children, Adult Human Capital and Adult Productivities," NIH grant HD046125 on "Education and Health over the Life Course in Guatemala," R01 HD045627-01 grant on "Resource Flows Among Three Generations in Guatemala," NIH/NIA grant P30 AG12836 to PARC at the University of Pennsylvania, the Boettner Center for Pensions and Retirement Security at the University of Pennsylvania and the Mellon Foundation grant to the Population Studies Center of the University of Pennsylvania. O

1. INTRODUCTION Guatemala is the only country in Latin America and the Caribbean region that shows an underweight prevalence of more then 20% and the largest stunting rate, 46.4%. Vitamin A deficiency, iron deficiency anemia and iodine deficiency disorders are also a serious concern, with prevalence rates of 21%, 34% and 16%, respectively (World Bank, 2006). However, stunted children and over-weight mothers coexist. This research attempts to explore the link between nutrition and productivity within the context of a developing country, Guatemala. The aim is to establish the causal effect of adult body size, in the form of height and body mass index2 (BMI) elasticity, upon current wage rates and annual earnings using data collected in four poor Guatemalan villages, settings where returns to physical strength and energy may be substantial. It is intuitively appealing to believe that better nourished individuals are more productive. Furthermore, the structure of employment in lower income economies is such that work often relies more heavily on physical characteristics such as strength and stamina, and therefore, on good health. However, the nutrition-productivity link is complex to establish. Although it is natural to assume that improved nutritional status leads to increased productivity, it is equally plausible that increased productivity leads to higher income which, in turn, improves nutritional status. This feedback between nutrition and productivity suggests that the labor market consequences of poor health are likely to be more serious for the poor who are more likely to suffer from severe health problems and to be working in jobs for which strength has a payoff. The relationship between health and market outcomes has been controversial and much less explored in comparison with returns to schooling. Although the link between nutrition and labor productivity has played a key role in theories of economic development through the idea of efficiency wages, former empirical studies on this subject have typically concluded that there is little reliable evidence. Thomas and Strauss (1997) pointed out that this lack of reliability 2 BMI is defined as the ratio between weight (in kilograms) and height (in meters) squared. 3

emerges from two causes: (1) the small number of studies on the matter reflects the fact that health indicators have rarely been collected in surveys that contain measures of wages or productivity; and (2) there is a non-trivial interpretation of correlations between health and labor outcomes; early studies have paid little or no attention to the direction of causality. Thus, these studies ignored the fact that any component of income, such as wages and labor supply, may affect current behavior which, in turn, affects health through the consumption of improved quality diet, and vice versa. Moreover, Leibenstein (1957) hypothesizes that, relative to poorly nourished workers, those who consume more calories are more productive, and that at very low levels of intake, better nutrition is associated with increasingly higher productivity. As well, Strauss and Thomas (1998) argue that such non-concavities lie at the heart of the efficiency wage models. Employers have an incentive to raise wages above the minimum supply price of labor excluding those workers in poorest health from the labor market because they are too costly to hire. Hoddinott et al. (2008), using data from Guatemalan individuals (aged 25-42 years), seem to be the first ones in assessing the direct effect of improved nutrition in early childhood on adult incomes, in contrast to the substantial but indirect evidence on this topic. They find that improved nutrition before, but not after, age 3 years is associated with higher hourly wages, but only for men. For instance, improved nutrition from 0 to 2 years increases hourly wages in US$0.67, which means a 46% increase in the average wage rate. There is a non-significant tendency for hours worked to be reduced and for annual incomes to be greater. This research attempts to find empirical validation for the positive effect of health, measured by height and BMI, upon labor market outcomes. Furthermore, the main objective is to establish a causal relationship between adult height and BMI and current wage rates and annual earnings using information collected in four poor Guatemalan villages, settings where returns to physical strength and energy may be substantial. Data comes from 'The Human Capital 2002-04 4

Study in Guatemala: A follow up to the INCAP Longitudinal Study 1969-77' in which a cohort of young men and women, who participated as young children in a randomized community trial of nutrition supplementation, were resurveyed 35 years later. In the original study, two randomly selected villages received a nutritional supplement and two other villages received a control drink. The follow-up study conducted during 2002-04 collects current data from the former participants. Formally, this paper focuses upon the following question: Does improved nutrition during childhood affect adult body size and, subsequently, economic productivity? In other words, how can this research exploit the experiment in the four Guatemalan villages to deal with the endogeneity bias and estimate the causal effect of height and BMI on wage rates and annual earnings? Moreover, returns to body size are estimated at different quantiles of the conditional wage distribution. The examination of this question in Hoddinott et al. (2008), where the same data is analyzed, differs from the approach in this paper in some ways: Hoddinott et al. (2008) estimate the direct effect of childhood nutrition upon adult labor outcomes using reduced form equations and, thus, linear regressions seem appropriate; alternatively, this paper attempts to estimate the indirect impact of improved childhood nutrition upon adult body size and the subsequent effect of body size upon adult labor outcomes applying an instrumental variable and quantile regression approach. Due to missing information in anthropometric variables, the sample of male and female Guatemalan workers included in this paper is slightly smaller. Previously, some researchers have been trying to understand the intricate interrelation between health, nutrition and economic productivity dealing with the potential endogeneity issue. Many of the studies in economics have dealt with this bias of simultaneous effects by developing models that predict the nutrition input variables based on exogenous factors such as prices and household demographic variables, in instrumental variable estimates. For instance, Immink and 3 Institute of Nutrition for Central America and Panama. 5

Viteri (1981a, 1981b) find for sugarcane cutters in Guatemala that it was the leisure time that appeared to be most affected by inadequate energy consumption. Men with low energy consumption decreased the energy intensity of their leisure time activities but not the amount of energy expended at work. When the energy intake increased, the men did not increase the supply of units of work but rather become more active in their leisure time. Another example is found in Immink, Viteri and Helms (1982) again for Guatemalan sugarcane cutters. Additionally, Strauss (1986), using data from Sierra Leone, uses the predicted household energy intake per capita to explain household farm production. The results suggest that household energy consumption was a positive, significant determinant of farm productivity. A similar approach is used by Sahn and Alderman (1988) with data from Sri Lanka. This study employs predicted household energy consumption per capita as the measure of nutritional status and relates it to wage earnings. Surprisingly, household energy per capita appears as a significant, positive determinant of men's but not of women's wages. This differential result between men's and women's productivity is a finding in almost all studies linking nutrition to productivity. Both the Strauss (1986) and Sahn and Alderman (1988) analysis are limited to the use of household energy values as the only measure of individual nutritional condition. Clearly, a measure of individual nutrient consumption and more importantly an indicator of an individual's nutritional status would have strengthened the analysis. Among other measures of individual nutrition, height and BMI have been widely analyzed in previous research. The best- documented fact in observational studies is that taller people tend to enjoy greater success in labor markets. At the micro level, many studies have demonstrated a positive association of height with hourly earnings. Seminal work by Fogel (1994) has documented secular increases in height which parallel economic growth in the historical literature. For instance, Deolalikar (1988) explains wage earnings and farm outputs with measures of both individual energy intake and BMI using data from India. The author finds that even 6

though energy intake is not a significant determinant of wages, BMI appears relevant. Also, BMI, but not energy consumption, has a significant, positive effect on farm output. Furthermore, Thomas and Strauss (1992, 1997) examine the nutrition-productivity link using wage earnings of both employees and the self-employed in urban Brazil. They use four indicators of nutrition as explanatory variables: height, BMI, per capita calorie consumption and per capita protein intakes. Their findings indicate that height is a significant determinant of the wages in urban Brazil: taller men and women earn more even after controlling for education and other dimensions of health. However, BMI is a positive and significant predictor of males' but not for females' wages. These authors suggest that BMI is probably correlated with strength since its effects are largest among the least educated men who are more likely to do manual labor and very physical demanding activities. Also, this research suggests that per capita calorie and protein intake are significantly related to wages but the positive effect of calories disappears rapidly indicating that it may only be the very malnourished for whom energy is a limiting factor for wage earnings. Interestingly, after controlling for height and BMI, calorie intake has diminishing returns; but when protein consumption is added to the model, protein intake has an increasingly effect in wages reflecting the impact of improved quality diet (measured by the fraction of calories from protein sources). The authors conclude that health (through improved nutrition) provides an important return to labor in Brazil. In addition, Strauss and Thomas (1998) conclude that the positive link between height, BMI and wages is also significant in the US: men who are taller and heavier (given height) earn higher wages. Moreover, Thomas and Frankenberg (2002a) indicate that even though BMI had no effect on earnings, BMI affected the wages of time-rate workers but not piece-rate workers for adult Indonesian males. They argue that health is difficult to observe and employers use the BMI as a marker for health. As well, these authors find that a 1% increase in height was associated with a 5% increase in earnings, suggesting that taller people are probably stronger, an attribute that is probably highly rewarded in lower-income settings. Also, they argue that height is a proxy for 7

Full document contains 181 pages
Abstract: This dissertation investigates micro relations between certain components of human capital and economic and welfare outcomes in Guatemala, a developing country with high levels of malnutrition and large gender inequalities. Three chapters contribute to the analysis. First, 'High quality nutrition in childhood, body size and wages in early adulthood: Evidence from Guatemalan workers' focuses on the mechanisms through which a high quality diet during childhood affects wages in early adulthood. Three main results emerge: (1) the causal effect, i.e. when unobserved heterogeneity is taken into account, of health on wages is positive; (2) such a causal effect is larger than the simple association; and (3) evidence is stronger for this effect for males than for females. In addition, this work estimates a set of unbiased returns to nutrition across the conditional wage distribution. Second, 'Nutritional supplementation of girls influences the growth of their children: Prospective study in Guatemala' focuses upon the impact of improved child nutrition for mothers on next-generation growth and development. Three key results emerge: (1) exposure to a nutritional supplement for mothers, but not for fathers, has significant intergenerational associations beyond previously documented associations in their own lives (e.g. chapter one), (2) nutritional supplementation of mothers is associated with substantial increases in their offspring birth weight, height, head circumference, height-for-age z score and weight-for-age z score, (3) maternal supplementation was not associated with other offspring anthropometric indicators that reflect measures of adiposity. Finally, 'Discrimination, marital bargaining power and intrahousehold allocation in Guatemala: A decomposition', explores gender differences inside marriage. The major result suggests that household food expenditure shares would increase if there were no differences in the bargaining power of wife and husband. Data on the population analyzed come from a nutritional supplementation trial conducted by the Institute of Nutrition of Central America and Panama (INCAP) between 1969 and 1977, the INCAP Longitudinal Study 1969-77, and subsequent follow-ups in 2002-04 and 2006-07. Based on the results in this study, policy interventions should target: (1) the improvement of the nutritional status of the Guatemalan population, and (2) the promotion of gender equality and female empowerment.