Perception, investments, and newborn's outcomes: the perception of a newborn's health and its influence on parental investment and health outcomes: Evidence from ELFE cohort

I study whether the parental perception of a newborn's health affects their investments in the child and their health outcomes later in childhood. I use the medical cutoff of low birth weight (<2.5kg.), a historically standard cutoff used to identify infants at high mortality risk. While the economic literature has already studied the implications similar cutoffs (<1.5kg.) have on children's development, most of it has focused on medical treatments as the primary mechanism. In this paper, I investigate whether parents also respond to this label by adapting their investment decisions. To answer this question, I use the French Longitudinal Study of Children ( Étude Longitudinale Française depuis l'Enfance-ELFE ). Using a regression discontinuity design approach, I find an improvement in nutritional outcomes for those that, on top of being low birth weight, are premature. I do not find strong evidence of direct medical intervention at birth based only on the cutoff. Conversely, I encounter that parents respond to children being labeled low birth weight. This is particularly so when looking at parental investments in pre-term children. While doctors might have an indirect role-through advice and recommendations to parents-ignoring parental responses at birth could lead to an under/overestimation of the returns of early-life interventions by the medical community.