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Natural disasters, self-insurance and human capital investment : evidence from Bangladesh, Ethiopia and Malawi

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Author Info

  • Yamauchi, Futoshi
  • Yohannes, Yisehac
  • Quisumbing, Agnes

Abstract

This paper examines the impacts of disasters on dynamic human capital production using panel data from Bangladesh, Ethiopia, and Malawi. The empirical results show that the accumulation of biological human capital prior to disasters helps children maintain investments in the post-disaster period. Biological human capital formed in early childhood (long-term nutritional status) plays a role of insurance with resilience to disasters by protecting schooling investment and outcomes, although disasters have negative impacts on investment. In Bangladesh, children with more biological human capital are less affected by the adverse effects of floods, and the rate of investment increases with the initial human capital stock in the post-disaster recovery process. In Ethiopia and Malawi, where droughts are rather frequent, exposure to highly frequent droughts in some cases reduces schooling investment but the negative impacts are larger among children embodying less biological human capital. Asset holdings prior to the disasters, especially the household's stock of intellectual human capital, also helps maintain schooling investments at least to the same degree as the stock of human capital accumulated in children prior to the disasters.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4910.

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Date of creation: 01 Apr 2009
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Handle: RePEc:wbk:wbrwps:4910

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Related research

Keywords: Natural Disasters; Hazard Risk Management; Access to Finance; Economic Theory&Research; Health Monitoring&Evaluation;

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References

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  1. Behrman, Jere R. & Murphy, Alexis & Quisumbing, Agnes R. & Yount, Kathryn, 2009. "Are returns to mothers' human capital realized in the next generation?: The impact of mothers' intellectual human capital and long-run nutritional status on children's human capital in Guatemala," IFPRI discussion papers 850, International Food Policy Research Institute (IFPRI).
  2. Futoshi Yamauchi, 2008. "Early Childhood Nutrition, Schooling, and Sibling Inequality in a Dynamic Context: Evidence from South Africa," Economic Development and Cultural Change, University of Chicago Press, vol. 56, pages 657-682.
  3. Hoddinott, John & Kinsey, Bill, 2001. " Child Growth in the Time of Drought," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(4), pages 409-36, September.
  4. Cunha, Flavio & Heckman, James J. & Lochner, Lance & Masterov, Dimitriy V., 2005. "Interpreting the Evidence on Life Cycle Skill Formation," IZA Discussion Papers 1675, Institute for the Study of Labor (IZA).
  5. del Ninno, Carlo & Dorosh, Paul A. & Smith, Lisa C. & Roy, Dilip K., 2001. "The 1998 floods in Bangladesh: disaster impacts, household coping strategies, and responses," Research reports 122, International Food Policy Research Institute (IFPRI).
  6. Harold Alderman & John Hoddinott & Bill Kinsey, 2004. "Long Term Consequences Of Early Childhood Malnutrition," HiCN Working Papers 09, Households in Conflict Network.
  7. Pitt, Mark M & Rosenzweig, Mark R, 1990. "Estimating the Intrahousehold Incidence of Illness: Child Health and Gender-Inequality in the Allocation of Time," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(4), pages 969-80, November.
  8. del Ninno, Carlo & Lundberg, Mattias, 2005. "Treading water: The long-term impact of the 1998 flood on nutrition in Bangladesh," Economics & Human Biology, Elsevier, vol. 3(1), pages 67-96, March.
  9. Noy, Ilan, 2009. "The macroeconomic consequences of disasters," Journal of Development Economics, Elsevier, vol. 88(2), pages 221-231, March.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. How to insure against natural disasters in the absence of insurance
    by Economic Logician in Economic Logic on 2009-05-18 20:15:00
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Cited by:
  1. Ulrich Schmidt, 2010. "Self-Insurance and Self-Protection as Public Goods," Kiel Working Papers 1613, Kiel Institute for the World Economy.
  2. Dang, Duc Anh, 2012. "On the sources of risk preferences in rural Vietnam," MPRA Paper 38058, University Library of Munich, Germany.
  3. Anh Duc Dang, 2012. "On the Sources of Risk Preferences in Rural Vietnam," ANU Working Papers in Economics and Econometrics 2012-593, Australian National University, College of Business and Economics, School of Economics.
  4. Lisa Cameron & Manisha Shah, 2013. "Risk-Taking Behavior in the Wake of Natural Disasters," NBER Working Papers 19534, National Bureau of Economic Research, Inc.
  5. Dang, Duc Anh, 2012. "On the sources of risk preferences in rural Vietnam," MPRA Paper 38738, University Library of Munich, Germany.
  6. Mueller, Valerie & Quisumbing, Agnes, 2010. "Short- and long-term effects of the 1998 Bangladesh flood on rural wages," IFPRI discussion papers 956, International Food Policy Research Institute (IFPRI).
  7. Eva Deuchert & Christina Felfe, 2013. "The Tempest: Natural Disasters, Early Shocks and Children's Short- and Long-Run Development," CESifo Working Paper Series 4168, CESifo Group Munich.

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  1. Economic Logic blog

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