It’s a Family Affair: Family Health and Child Well-being

While the relationship between own health and subjective well-being is well documented, evidence is limited regarding the relationship of the latter with respect to the health of a family member. Recent models of human capital formation link human development to the stability of the home environment and to parental health. Using a unique longitudinal data from four developing countries, we extend this strand of the literature by investigating the role of family health on the well-being of adolescents. Our results show that family illness negatively affects subjective well-being. This effect is stronger for health problems of siblings than parents. We explore potential mechanisms and find that the most significant transmission channel for parental health is the shared social environment. The effect of the illness of siblings appears to be mostly driven by psychological factors.