In this paper, we utilize data on birthweight and gestational age among siblings and maternal behaviors together with latent variable methods to estimate (i) the effects of maternal behaviors, including substance abuse, cigarette smoking, prenatal care, birth spacing and timing, and weight gain on the two birth outcomes, (ii) the variance in the health endowment common to the two measures and to siblings, (iii) the covariance between the maternal behaviors and health endowments, and (iv) the variance in measurement errors for each outcome. We use the estimates to examine the effects of different policies on inequality in birth outcomes.
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Rosenzweig et al. (1991) studied this question.
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