2026 Theses Doctoral

Essays on the Economics of Vulnerable Children

Musen, Kate H.

This dissertation is a collection of three chapters studying how policy and society have affected the health, human capital, and economic outcomes of vulnerable children in the United States. These chapters focus on foster care policy targeting youth aging out of foster care, on the spillovers of the opioid epidemic onto school children, and on the national effort to improve nutrition during pregnancy and childhood through the introduction of iodized salt.

In the first chapter, I study the effects of allowing youth to stay in foster care beyond the age of 18. In the United States, about six percent of children—and nearly 12 percent of Black children—experience a foster care placement before age 18. Youth who spend time in foster care, and particularly those who age out of the system, attain less education and are less likely to be employed in adulthood than peers from similar socioeconomic backgrounds. In 2012, California introduced extended foster care, allowing eligible youth to remain in care until age 21 instead of exiting at 18. Using a difference-in-differences design comparing affected and unaffected cohorts, I find that each additional year of extended care increases college enrollment by 6 percent and formal employment at ages 24–26 by 4 percent. These effects are concentrated among the most vulnerable youth, including those with more reports of maltreatment and those without relatives to provide care. Non-Hispanic white men are disproportionately represented among these high-vulnerability groups and experience correspondingly larger gains. Conservative estimates indicate that each dollar spent on extended foster care generates at least three dollars in benefits, suggesting that well-designed interventions can also yield meaningful returns in late adolescence—a stage of life where government investments are often thought to be less effective.

In the second chapter, I evaluate the spillover effects of the prescription opioid epidemic on children living with families and in communities with adults affected by the crisis. I provide novel estimates of the causal effects of exposure to the opioid epidemic on educational progress for California students. I develop a new time-varying instrument for prescription opioids derived from Purdue Pharma's evolving marketing strategy, which targeted areas with high rates of different diseases over time. Moving from the 25th to the 75th percentile of instrumented per capita opioids, standardized test scores fall by 0.65–1.57% of the mean. High school exit exam pass rates fall by a greater magnitude. I find no evidence of overall changes in dropout rates, but ninth- and tenth-grade dropout rates increase. Estimates from IV regressions are much larger in magnitude than those using OLS. I find a significant adverse impact of community opioid use on the academic performance of the marginal affected child, highlighting previously overlooked intergenerational consequences of the opioid crisis.

In the third chapter, joint with Donato Onorato, we study the effects of the nationwide introduction of iodized table salt in 1924 in the United States. We exploit this natural experiment and the pre-period geographic variation in iodine deficiency driven by differences in the iodine content of food and water to estimate the effects of iodized salt on both health and human capital outcomes. We find that iodized salt reduced infant mortality by 1.1 deaths per 1,000 births (1.6%) for counties at the 75th percentile of iodine deficiency relative to the 25th percentile. These effects are concentrated in urban counties—where iodized salt was disproportionately available—explaining one third of the decline in the urban-rural infant mortality gap in the 1920s. We also show that the long-term effects on labor market outcomes are consistently large among urban-born individuals, reconciling conflicting results in the past literature.