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The “fetal origin hypothesis” predicts that the exposure to unfavorable environments early in life negatively affects future health and non-health (e.g. income) outcomes. This paper evaluates this theory by examining the effect of in utero exposure to influenza pandemic of 1957-58, the 2nd biggest of the 20th century, on the future earnings of exposed cohort. Using data from National Longitudinal Survey of Youth 1979 (NLSY79), a difference-in-differences model is estimated for four demographic groups: white and non-white males and females. While the effect of this exposure on earnings of white individuals is statistically insignificant, the effect is both (economically and statistically) significant and contradictory for non-whites. Non-white females experienced a $6100 loss in their yearly wage while the wage of non-white males increased by about $11900.

The Effect of In Utero Exposure to Asian Flu (1957-58) on Future Earnings