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Critical periods and the long-run effects of income shocks on education: evidence from Indonesia

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  • Menéndez, Marta
  • Gignoux, Jérémie

Abstract

This paper examines how adverse shocks experienced by households, such as natural disasters, crop or job losses, or deaths, influence the acquisition of human capital of children, in the long run, and investigates whether some periods of childhood appear to be more critical in the sense that shocks during those have more lasting impacts. We use data from the four waves of the Indonesian Family Life Surveys (1993, 1997, 2000 and 2007), and follow a panel of siblings from early ages into young adulthood. Our preliminary results exhibit heterogeneities by areas and types of shocks: in the long-run, natural disasters, deaths and market shocks are found to negatively affect educational attainments of children in urban households, while crop losses have a similar long-lasting effect in rural areas. Moreover, we find little evidence in this sample that shocks experienced earlier in life have more lasting impacts than later ones. Finally, our preliminary findings do not indicate that locality-level negative shocks have direct effects on human capital investments beyond the direct losses suffered by households. This study is still ongoing, and an important progress under way is the use of objective data on shocks using meteorological data on natural disasters, and notably earthquakes, that occurred in Indonesia over the last 20 years or so.

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File URL: http://basepub.dauphine.fr/xmlui/bitstream/123456789/6637/3/ESPE2012_0683_paper.pdf
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Paper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/6637.

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Date of creation: Jun 2012
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Handle: RePEc:dau:papers:123456789/6637

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Keywords: human capital; income shocks; critical periods; Indonesia; natural disasters;

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  1. Cogneau, Denis & Jedwab, Rémi, 2008. "Family Income and Child Outcomes: The 1990 Cocoa Price Shock in Cote d’Ivoire," Economics Papers from University Paris Dauphine 123456789/4319, Paris Dauphine University.
  2. Christopher D Carroll, 1990. "Buffer-Stock Saving and the Life Cycle/Permanent Income Hypothesis," Economics Working Paper Archive 371, The Johns Hopkins University,Department of Economics, revised Aug 1996.
  3. Christina Paxson & Norbert Schady, 2005. "Cognitive Development Among Young Children in Ecuador: The Roles of Wealth, Health and Parenting," Working Papers 239, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
  4. John Strauss & Duncan Thomas & Firman Witoelar & Elizabeth Frankenberg & Bondan Sikoki & Cecep Sumantri & Wayan Suriastini, 2010. "Cutting the costs of attrition: Results from the Indonesia Family Life Survey," Working Papers id:2652, eSocialSciences.
  5. Duryea, Suzanne & Lam, David & Levison, Deborah, 2007. "Effects of economic shocks on children's employment and schooling in Brazil," Journal of Development Economics, Elsevier, vol. 84(1), pages 188-214, September.
  6. Glewwe, Paul & Jacoby, Hanan G. & King, Elizabeth M., 2001. "Early childhood nutrition and academic achievement: a longitudinal analysis," Journal of Public Economics, Elsevier, vol. 81(3), pages 345-368, September.
  7. Cameron, Lisa A. & Shah, Manisha, 2012. "Risk-Taking Behavior in the Wake of Natural Disasters," IZA Discussion Papers 6756, Institute for the Study of Labor (IZA).
  8. Beegle, Kathleen & Dehejia, Rajeev H. & Gatti, Roberta, 2006. "Child labor and agricultural shocks," Journal of Development Economics, Elsevier, vol. 81(1), pages 80-96, October.
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