Sixty years after the magic carpet ride: The long-run effect of the early childhood environment on social and economic outcomes

Eric D. Gould*, Victor Lavy, M. Daniele Paserman

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

46 Scopus citations


This paper estimates the effect of the early childhood environment on a large array of social and economic outcomes lasting almost 60 years. To do this, we exploit variation in the living conditions experienced by Yemenite children after being airlifted to Israel in 1949. We find that children who were placed in a more modern environment (i.e. with better sanitary and infrastructure conditions) were more likely to obtain higher education, marry at an older age, have fewer children, and work at age 55. They were also more likely to be assimilated into Israeli society, to be less religious, and have more worldly tastes in music and food. However, these effects are found mainly for women and not for men. We also find an effect on the next generation-children who lived in a better environment grew up to have children with more education.

Original languageAmerican English
Pages (from-to)938-973
Number of pages36
JournalReview of Economic Studies
Issue number3
StatePublished - 1 Jul 2011

Bibliographical note

Funding Information:
Acknowledgement. We thank Yossef Bashara of Taldor for coordinating and managing the Yemenite survey. Yaron Aronshtam, Shahaf Cohen, Dorit Hofnung, and Roy Mill provided able research assistance. We benefited from helpful comments by the editor, Imran Rasul, three anonymous referees, and participants at the NBER Labor Studies and Cohort Studies Spring 2008 conferences, NBER Summer Institute Children’s Workshop in 2008, the Centre for Market and Public Organisation Bristol 2008 conference, the Society of Labor Economists 2009 Annual Meetings, the Econometric Society 2009 North American Summer Meeting, and seminars at Aarhus, Bar Ilan University, Cornell University, Institut d’Anàlisi Econòmica—Barcelona, London School of Economics, and Hebrew University. This research was supported by Israel Science Foundation Grant No. 1309/04 and by the Maurice Falk Institute for Economic Research.


  • Childhood environment
  • Neighbourhood effects


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