(DP 2026-01) Childhood Nutrition and Labor Market Outcomes: A Sequential Mediation Analysis

Abstract

This paper investigates the long-term economic consequences of childhood nutrition in the Philippines, focusing on the mediating roles of cognitive development and schooling. Using longitudinal data from the Cebu Longitudinal Health and Nutrition Survey (CLHNS), we apply a sequential mediation analysis using the inverse odds ratio weighting (IORW) approach to decompose the total effect of severe stunting on adult labor market outcomes into direct effects and indirect effects through IQ and educational attainment. The results show that severe stunting significantly reduces both the likelihood of formal employment and daily earnings in early adulthood. Severely stunted children were about 28% less likely to be employed in the formal sector and earned 20% less per day compared to their non-stunted peers at age 22. Mediation analysis reveals that the indirect effect through IQ alone is modest, but the sequential pathway through IQ and college graduation accounts for about one-third of the total effect on formal employment and about 15% of the effect on daily earnings.

JEL Codes:  I15, I25, J24