Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Effects of Natural Disasters on Human Capital Accumulation

Contents:

Author Info

  • Thomas K.J. McDermott

    ()
    (School of Business and Institute for International Integration Studies, Trinity College Dublin)

Abstract

In this paper I investigate the effects of disasters on human capital accumulation using an extensive panel dataset on natural disasters, covering 170 countries over a 25 year period (1980-2004). My analysis shows that disasters have both a direct, contemporaneous effect and a long-term, indirect effect on human capital. While the direct effects - primarily related to injury, illness and death suffered as a result of the disaster - are relatively straightforward, the indirect effects will depend on household decision-making in the aftermath of the disaster. Treating human capital as a long-term investment decision, it is clear that access to finance is likely to be a crucial factor in household decisions about whether or not to invest in children's health and education. Indeed, my results show that aid flows are effective in mitigating the long-term impacts of disasters on health outcomes. However, for school enrollment rates, the longer-term effects of disasters are dependent on the availability of credit. These findings could have important policy implications. The indirect effects are unlikely to have been identified in previous analyses that focus on the short-term impacts of natural disasters. Given the importance of human capital in the process of economic development, the results presented here suggest that natural disasters represent a significant threat to the development prospects of relatively poor countries.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.tcd.ie/iiis/documents/discussion/pdfs/iiisdp391.pdf
Download Restriction: no

Bibliographic Info

Paper provided by IIIS in its series The Institute for International Integration Studies Discussion Paper Series with number iiisdp391.

as in new window
Length: 35 pages
Date of creation: Nov 2011
Date of revision: Feb 2012
Handle: RePEc:iis:dispap:iiisdp391

Contact details of provider:
Postal: 01
Phone: 00 353 1 896 3888
Fax: 00 353 1 896 3939
Web page: http://www.tcd.ie/iiis/
More information through EDIRC

Related research

Keywords: natural disasters; epidemics; human capital; credit markets; development;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Barro, Robert J, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 407-43, May.
  2. Lance J. Lochner & Alexander Monge-Naranjo, 2010. "The Nature of Credit Constraints and Human Capital," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20101, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  3. Jalan, Jyotsna & Ravallion, Martin, 2002. "Household Income Dynamics in Rural China," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Thomas K.J. McDermott & Frank Barry & Richard S.J. Tol, 2013. "Disasters and Development: Natural Disasters, Credit Constraints and Economic Growth," CEDI Discussion Paper Series 13-03, Centre for Economic Development and Institutions(CEDI), Brunel University.
  5. Levine, Ross & Loayza, Norman & Beck, Thorsten, 2000. "Financial intermediation and growth: Causality and causes," Journal of Monetary Economics, Elsevier, vol. 46(1), pages 31-77, August.
  6. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-67, June.
  7. Taubman, Paul, 1989. "Role of Parental Income in Educational Attainment," American Economic Review, American Economic Association, vol. 79(2), pages 57-61, May.
  8. Frederic Zimmerman & MICHAEL R. CARTER, . "Asset Smoothing, Consumption Smoothing and the Reproduction for Inequality under Risk and Subsistence Constraints," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 402, Wisconsin-Madison Agricultural and Applied Economics Department.
  9. Stefan Dercon, 2003. "Growth and Shocks: evidence from rural Ethiopia," Economics Series Working Papers WPS/2003-12, University of Oxford, Department of Economics.
  10. William A. Masters & Margaret S. McMillan, 2000. "Climate and Scale In Economic Growth," CID Working Papers 48, Center for International Development at Harvard University.
  11. Jacoby, Hanan G, 1994. "Borrowing Constraints and Progress through School: Evidence from Peru," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 151-60, February.
  12. Harold Alderman & John Hoddinott & Bill Kinsey, 2006. "Long term consequences of early childhood malnutrition," Oxford Economic Papers, Oxford University Press, vol. 58(3), pages 450-474, July.
  13. Barry, Frank, 1999. "Government Consumption and Private Investment in Closed and Open Economies," Journal of Macroeconomics, Elsevier, vol. 21(1), pages 93-106, January.
  14. Cuaresma, Jesus Crespo, 2009. "Natural disasters and human capital accumulation," Policy Research Working Paper Series 4862, The World Bank.
  15. Flug, Karnit & Spilimbergo, Antonio & Wachtenheim, Erik, 1998. "Investment in education: do economic volatility and credit constraints matter?," Journal of Development Economics, Elsevier, vol. 55(2), pages 465-481, April.
  16. Baez, Javier E. & de la Fuente, Alejandro & Santos, Indhira, 2010. "Do Natural Disasters Affect Human Capital? An Assessment Based on Existing Empirical Evidence," IZA Discussion Papers 5164, Institute for the Study of Labor (IZA).
  17. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
  18. David E. Bloom & David Canning & Jaypee Sevilla, 2001. "Economic Growth and the Demographic Transition," NBER Working Papers 8685, National Bureau of Economic Research, Inc.
  19. Mark Skidmore & Hideki Toya, 2002. "Do Natural Disasters Promote Long-Run Growth?," Economic Inquiry, Western Economic Association International, vol. 40(4), pages 664-687, October.
  20. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-89, December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Wenzel, Lars & Wolf, André, 2013. "Protection against major catastrophes: An economic perspective," HWWI Research Papers 137, Hamburg Institute of International Economics (HWWI).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iis:dispap:iiisdp391. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Colette Keleher).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.