The Impact of Iodine Deficiency Eradication on Schooling: Evidence from the Introduction of Iodized Salt in Switzerland

This paper examines the impact of salt iodization in Switzerland in the 1920s and 1930s on schooling outcomes. Iodine deficiency in utero causes mental retardation, and correcting the deficiency is expected to increase the productivity of a population by increasing its cognitive ability. The exogenous increase in cognitive ability brought about by the iodization program is also useful in the context of disentangling the effects of innate ability and education in later-life outcomes. I identify the impact of iodization in three ways: first, in a differences-in-differences framework, I exploit geographic variation in iodine deficiency, as well as the fact that the nationwide campaign to decrease iodine deficiency began in 1922. Second, I use spatial and temporal variation in the introduction of iodized salt across Swiss cantons, and examine whether the level of iodized salt sales at the time of one’s birth affected one’s educational attainment. Third, I employ a fuzzy regression discontinuity design and use jumps in sales of iodized salt across Swiss cantons to identify the effect of iodization, by comparing outcomes for those born right before and right after these sudden changes in the treatment environment. These approaches indicate that the eradication of iodine deficiency in previously deficient areas increased the schooling of the population significantly. The effects are larger for females than for males, which is consistent with medical evidence showing that women are more likely to be affected by iodine deficiency disorders than men.

The Economic Effects of Micronutrient Deficiency: Evidence from Salt Iodization in the United States

Iodine deficiency is the leading cause of preventable mental retardation in the world today. Iodine deficiency was common in the developed world until the introduction of iodized salt in the 1920’s. The incidence of iodine deficiency is connected to low iodine levels in the soil and water. We examine the impact of salt iodization in the US by taking advantage of this natural geographic variation. Areas with high pre-treatment levels of iodine deficiency provide a treatment group which we can compare to a control group of low iodine deficiency areas. In the US, salt was iodized over a very short period of time around 1924. We use previously unused data collected during WWI and WWII to compare outcomes of cohorts born before and after iodization, in localities that were naturally poor and rich in iodine. We find evidence of the beneficial effects of iodization on the cognitive abilities of the cohorts exposed to it.

Finance and Balanced Growth

The Uzawa (1961) theorem applied to finance and growthsuggests that a long-run positive correlation between financial efficiency and depth is only present when variations in the extent of access to financial services are considered. Improvements in financial efficiency can lead to new capital augmenting technologies along the balanced path, but only improvements in financial efficiency directed towards labor can change the rate of growth in the long-run. These findings suggest ways to understand some of the more nuanced relationships between finance and growth observed in the data and point in a number of directions for future research.

Balanced Budget Government Spending in a Small Open Regional Economy

This paper investigates the impact of a balanced budget fiscal policy expansion in a regional context within a numerical dynamic general equilibrium model. We take Scotland as an example where, recently, there has been extensive debate on greater fiscal autonomy. In response to a balanced budget fiscal expansion the model suggests that: an increase in current government purchase in goods and services has negative multiplier effects only if the elasticity of substitution between private and public consumption is high enough to move downward the marginal utility of private consumers; public capital expenditure crowds in consumption and investment even with a high level of congestion; but crowding out effects might arise in the short-run if agents are myopic.

The effects of the generalized use of iodized salt on occupational patterns in Switzerland.

This paper examines the impact of salt iodization in Switzerland in the 1920s and 1930s on occupational patterns of cohorts born after the intervention. The generalized use of iodized salt successfully combatted iodine deficiency disorders, which were previously endemic in some areas of Switzerland. The most important effect of universal prophylaxis by means of iodized salt was the eradication of mental retardation inflicted in utero by lack of iodine. This paper looks for evidence of increased cognitive ability of those treated with iodine in utero by examining the occupational choice and characteristics of occupations chosen by cohorts born after the intervention. By exploiting variation in pre-existing conditions and in the timing of the intervention, I find that cohorts born in previously highly-deficient areas after the introduction of iodized salt self-selected into higher-paying occupations. I also find that the characteristics of occupations in those areas changed, and that cohorts born after the intervention engaged to a higher degree in occupations with higher cognitive demands, whereas they opted out of physical-labor-intensive occupations.