The role of permanent income and family structure in the determination of child health in Canada

Abstract We use data from the Ontario Child Health Study (OCHS) to provide the first Canadian estimates of how the empirical association between child health and both low‐income and family status (lone‐mother versus two‐parent) changes when we re‐estimate the model with pooled data. Two waves of data provide a better indication of the family's long‐run level of economic resources than does one wave. Our measures of health status include categorical indicators and the health utility score derived from the Health Utilities Index Mark 2 (HUI2) system. Consistent with findings from other countries, we find that most outcomes are more strongly related to low‐average income (in 1982 and 1986) than to low‐current income in either year. Unlike some previous research, we find the quantitative impact of low‐income on child health to be modest to large. Lone‐mother status is negatively associated with most outcomes, but the lone‐mother coefficients did not change significantly when we switched from low‐current income to low‐average income. This implies that the lone‐mother coefficient in single cross‐sections is not just a proxy for low‐permanent income. Copyright © 2001 John Wiley & Sons, Ltd.