BAD TIMES, SLIMMER CHILDREN?

Although the majority of the literature has confirmed that recessions are beneficial for adults' health and babies' outcomes at delivery, this effect should not necessarily be the same for children. In this paper, we study the effect of business cycle conditions on infant underweight, overweight, and obesity. We exploit eight waves of repeated cross-sectional data (1987-2012) of the Spanish National Health Survey for children aged 2-15 and use the regional unemployment rate of the trimester of the interview as a proxy for the business cycle phase at the local level. We find that an increase in the unemployment rate is associated with lower obesity incidence, especially for children under 6 years old and over 12 years old. However, economic shocks also proof to have potentially negative consequences as they increase the prevalence of infant underweight for the same age groups. Moreover, we show that the possible mechanisms through which the cycle is impacting infant obesity is the nutritional composition of the children's diet, as well as, increases in the frequency of exercise. We provide some evidence that suggests that the impact of business cycle conditions on infant weight disorders have little objective health consequences in the short run. However, the potential long-term effects may become important as underweight during childhood is associated with worse outcomes later in life. Copyright © 2016 John Wiley & Sons, Ltd.