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Prenatal Exposure to Harmful Health Behaviors and Human Capital Development
The primary empirical issue that arises when examining the relationship between maternal health behaviors and child outcomes is the endogeneity of maternal substance use: women who smoke or drink while pregnant are likely to vary in other dimensions as well. To address this endogeneity issue, I generate plausibly exogenous variation in maternal health behaviors; for example, I relate harmful health behaviors during pregnancy to changes in state excise taxes over the mother’s life course. I use data from the National Longitudinal Survey of Youth and other sources, and focus on outcomes related to health, development, and human capital. Finally, I consider the policy implications of the analysis, including the optimal taxation of health behaviors.