IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/9836.html
   My bibliography  Save this paper

The Intergenerational Effects of Economic Sanctions

Author

Listed:
  • Moeeni,Safoura

Abstract

While economic sanctions are successful in achieving political goals, can hurt thecivilian population. These negative effects could be even more detrimental and long-lasting for future generations.This study estimates the effects of economic sanctions on children’s education by exploiting the United Nationssanctions imposed on Iran in 2006. Using the variation in the strength of sanctions across industries anddifference-in-differences with synthetic control analyses, this study finds that the sanctions decreased children’stotal years of schooling by 0.1 years and the probability of attending college by 4.8 percentage points. Moreover,households reduced education spending by 58 percent— particularly on school tuition. These effects are larger forchildren who were exposed longer to the sanctions. The results imply that sanctions have a larger effect on theincome of children than their parents. Therefore, ignoring the effects of sanctions on future generations significantlyunderstates their total economic costs.

Suggested Citation

  • Moeeni,Safoura, 2021. "The Intergenerational Effects of Economic Sanctions," Policy Research Working Paper Series 9836, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9836
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/150531636051396237/pdf/The-Intergenerational-Effects-of-Economic-Sanctions.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hoyt Bleakley & Joseph Ferrie, 2016. "Shocking Behavior: Random Wealth in Antebellum Georgia and Human Capital Across Generations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(3), pages 1455-1495.
    2. Draca, Mirko & Garred, Jason & Stickland, Leanne & Warrinnier, Nele, 2018. "On Target? The Incidence of Sanctions Across Listed Firms in Iran," CAGE Online Working Paper Series 372, Competitive Advantage in the Global Economy (CAGE).
    3. Jo Blanden, 2004. "Family Income and Educational Attainment: A Review of Approaches and Evidence for Britain," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 20(2), pages 245-263, Summer.
    4. Tansel, AysIt & Bircan, Fatma, 2006. "Demand for education in Turkey: A tobit analysis of private tutoring expenditures," Economics of Education Review, Elsevier, vol. 25(3), pages 303-313, June.
    5. Day Manoli & Nicholas Turner, 2018. "Cash-on-Hand and College Enrollment: Evidence from Population Tax Data and the Earned Income Tax Credit," American Economic Journal: Economic Policy, American Economic Association, vol. 10(2), pages 242-271, May.
    6. Katrine V. Løken & Magne Mogstad & Matthew Wiswall, 2012. "What Linear Estimators Miss: The Effects of Family Income on Child Outcomes," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 1-35, April.
    7. Di Maio, Michele & Nisticò, Roberto, 2019. "The effect of parental job loss on child school dropout: Evidence from the Occupied Palestinian Territories," Journal of Development Economics, Elsevier, vol. 141(C).
    8. Gordon B. Dahl & Lance Lochner, 2012. "The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit," American Economic Review, American Economic Association, vol. 102(5), pages 1927-1956, August.
    9. Azam, Mehtabul & Kingdon, Geeta Gandhi, 2013. "Are Girls the Fairer Sex in India? Revisiting Intra-Household Allocation of Education Expenditure," World Development, Elsevier, vol. 42(C), pages 143-164.
    10. Michael F. Lovenheim & C. Lockwood Reynolds, 2013. "The Effect of Housing Wealth on College Choice: Evidence from the Housing Boom," Journal of Human Resources, University of Wisconsin Press, vol. 48(1), pages 1-35.
    11. Artuc, Erhan & Lederman, Daniel & Porto, Guido, 2015. "A mapping of labor mobility costs in the developing world," Journal of International Economics, Elsevier, vol. 95(1), pages 28-41.
    12. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    13. Randall K. Q. Akee & William E. Copeland & Gordon Keeler & Adrian Angold & E. Jane Costello, 2010. "Parents' Incomes and Children's Outcomes: A Quasi-experiment Using Transfer Payments from Casino Profits," American Economic Journal: Applied Economics, American Economic Association, vol. 2(1), pages 86-115, January.
    14. Nikolay Doudchenko & Guido W. Imbens, 2016. "Balancing, Regression, Difference-In-Differences and Synthetic Control Methods: A Synthesis," NBER Working Papers 22791, National Bureau of Economic Research, Inc.
    15. Tullio Jappelli & Luigi Pistaferri, 2014. "Fiscal Policy and MPC Heterogeneity," American Economic Journal: Macroeconomics, American Economic Association, vol. 6(4), pages 107-136, October.
    16. George Bulman & Robert Fairlie & Sarena Goodman & Adam Isen, 2021. "Parental Resources and College Attendance: Evidence from Lottery Wins," American Economic Review, American Economic Association, vol. 111(4), pages 1201-1240, April.
    17. Nicholas S. Souleles & Jonathan A. Parker & David S. Johnson, 2006. "Household Expenditure and the Income Tax Rebates of 2001," American Economic Review, American Economic Association, vol. 96(5), pages 1589-1610, December.
    18. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1797-1855, December.
    19. Zhuan Pei & Jörn-Steffen Pischke & Hannes Schwandt, 2019. "Poorly Measured Confounders are More Useful on the Left than on the Right," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 37(2), pages 205-216, April.
    20. Grimm, Michael, 2011. "Does household income matter for children's schooling? Evidence for rural Sub-Saharan Africa," Economics of Education Review, Elsevier, vol. 30(4), pages 740-754, August.
    21. Pan, Weixiang & Ost, Ben, 2014. "The impact of parental layoff on higher education investment," Economics of Education Review, Elsevier, vol. 42(C), pages 53-63.
    22. Ahn, Daniel P. & Ludema, Rodney D., 2020. "The sword and the shield: The economics of targeted sanctions," European Economic Review, Elsevier, vol. 130(C).
    23. Acemoglu, Daron & Pischke, J. -S., 2001. "Changes in the wage structure, family income, and children's education," European Economic Review, Elsevier, vol. 45(4-6), pages 890-904, May.
    24. Djavad Salehi-Isfahani & Nadia Hassine & Ragui Assaad, 2014. "Equality of opportunity in educational achievement in the Middle East and North Africa," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(4), pages 489-515, December.
    25. Eduardo Cavallo & Sebastian Galiani & Ilan Noy & Juan Pantano, 2013. "Catastrophic Natural Disasters and Economic Growth," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1549-1561, December.
    26. Melvin Stephens, 2008. "The Consumption Response to Predictable Changes in Discretionary Income: Evidence from the Repayment of Vehicle Loans," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 241-252, May.
    27. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 257-298, National Bureau of Economic Research, Inc.
    28. Djavad Salehi-Isfahani, 2012. "Education, Jobs, and Equity in the Middle East and North Africa," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 54(4), pages 843-861, December.
    29. Deon Filmer & Lant Pritchett, 1999. "The Effect of Household Wealth on Educational Attainment: Evidence from 35 Countries," Population and Development Review, The Population Council, Inc., vol. 25(1), pages 85-120, March.
    30. Farzanegan, Mohammad Reza & Markwardt, Gunther, 2009. "The effects of oil price shocks on the Iranian economy," Energy Economics, Elsevier, vol. 31(1), pages 134-151, January.
    31. Bound, John & Turner, Sarah, 2007. "Cohort crowding: How resources affect collegiate attainment," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 877-899, June.
    32. Nathaniel G. Hilger, 2016. "Parental Job Loss and Children's Long-Term Outcomes: Evidence from 7 Million Fathers' Layoffs," American Economic Journal: Applied Economics, American Economic Association, vol. 8(3), pages 247-283, July.
    33. Seth D. Zimmerman, 2014. "The Returns to College Admission for Academically Marginal Students," Journal of Labor Economics, University of Chicago Press, vol. 32(4), pages 711-754.
    34. Deaton, A., 1992. "Saving and Income Smoothing in Cote d'Ivoire," Papers 156, Princeton, Woodrow Wilson School - Development Studies.
    35. James G. MacKinnon & Matthew D. Webb, 2019. "Wild Bootstrap Randomization Inference for Few Treated Clusters," Advances in Econometrics, in: The Econometrics of Complex Survey Data, volume 39, pages 61-85, Emerald Group Publishing Limited.
    36. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    37. Stephen V. Cameron & James J. Heckman, 2001. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 455-499, June.
    38. Castelló-Climent, Amparo & Hidalgo-Cabrillana, Ana, 2012. "The role of educational quality and quantity in the process of economic development," Economics of Education Review, Elsevier, vol. 31(4), pages 391-409.
    39. Joanne Xiaolei Qian & Russell Smyth, 2011. "Educational expenditure in urban China: income effects, family characteristics and the demand for domestic and overseas education," Applied Economics, Taylor & Francis Journals, vol. 43(24), pages 3379-3394.
    40. Raj Chetty & Adam Szeidl, 2007. "Consumption Commitments and Risk Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 831-877.
    41. Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2015. "Comparative Politics and the Synthetic Control Method," American Journal of Political Science, John Wiley & Sons, vol. 59(2), pages 495-510, February.
    42. Irene Botosaru & Bruno Ferman, 2019. "On the role of covariates in the synthetic control method," The Econometrics Journal, Royal Economic Society, vol. 22(2), pages 117-130.
    43. M. Hakan Berument & Nildag Basak Ceylan & Nukhet Dogan, 2010. "The Impact of Oil Price Shocks on the Economic Growth of Selected MENA1 Countries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 149-176.
    44. Mohammad Reza Farzanegan, 2019. "The Effects of International Sanctions on Military Spending of Iran: A Synthetic Control Analysis," CESifo Working Paper Series 7937, CESifo.
    45. Jacob Bastian & Katherine Michelmore, 2018. "The Long-Term Impact of the Earned Income Tax Credit on Children’s Education and Employment Outcomes," Journal of Labor Economics, University of Chicago Press, vol. 36(4), pages 1127-1163.
    46. Coelli, Michael B., 2011. "Parental job loss and the education enrollment of youth," Labour Economics, Elsevier, vol. 18(1), pages 25-35, January.
    47. Acar, Elif Öznur & Günalp, Burak & Cilasun, Seyit Mümin, 2016. "An empirical analysis of household education expenditures in Turkey," International Journal of Educational Development, Elsevier, vol. 51(C), pages 23-35.
    48. Nader Habibi, 2001. "Fiscal Response to Fluctuating Oil Revenues in Oil Exporting Countries of the Middle East," Working Papers 0136, Economic Research Forum, revised 11 2001.
    49. Farzanegan, Mohammad Reza, 2011. "Oil revenue shocks and government spending behavior in Iran," Energy Economics, Elsevier, vol. 33(6), pages 1055-1069.
    50. Martin Browning & Thomas F. Crossley, 2009. "Shocks, Stocks, and Socks: Smoothing Consumption Over a Temporary Income Loss," Journal of the European Economic Association, MIT Press, vol. 7(6), pages 1169-1192, December.
    51. Løken, Katrine V., 2010. "Family income and children's education: Using the Norwegian oil boom as a natural experiment," Labour Economics, Elsevier, vol. 17(1), pages 118-129, January.
    52. Ioana M. PETRESCU, 2016. "The Humanitarian Impact Of Economic Sanctions," Europolity – Continuity and Change in European Governance - New Series, Department of International Relations and European Integration, National University of Political Studies and Public Administration, vol. 10(2), pages 1-41.
    53. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    54. Emmanuel Skoufias & Susan Parker, 2006. "Job loss and family adjustments in work and schooling during the Mexican peso crisis," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(1), pages 163-181, February.
    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


    Cited by:

    1. Moghaddasi Kelishomi, Ali & Nisticò, Roberto, 2022. "Employment effects of economic sanctions in Iran," World Development, Elsevier, vol. 151(C).
    2. Moeeni, Safoura & Wei, Feng, 2022. "The labor market returns to unobserved skills: Evidence from a gender quota," CLEF Working Paper Series 53, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    3. Moeeni, Safoura & Tanaka, Atsuko, 2023. "The effects of labor market opportunities on education: The case of a female hiring ceiling in Iran," Journal of Public Economics, Elsevier, vol. 224(C).
    4. Veronika Yu. Zemzyulina & Natalya R. Kelchevskaya & Ilia M. Chernenko, 2023. "The Impact of Sustainable Development and Reliability on the Performance of Russian Enterprises in the Context of an Economic Fragmentation," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 22(4), pages 1056-1086.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. George Bulman & Robert Fairlie & Sarena Goodman & Adam Isen, 2021. "Parental Resources and College Attendance: Evidence from Lottery Wins," American Economic Review, American Economic Association, vol. 111(4), pages 1201-1240, April.
    2. Gurgand, Marc & Lorenceau, Adrien & Mélonio, Thomas, 2023. "Student loans: Credit constraints and higher education in South Africa," Journal of Development Economics, Elsevier, vol. 161(C).
    3. Elizabeth M. Caucutt & Lance Lochner, 2020. "Early and Late Human Capital Investments, Borrowing Constraints, and the Family," Journal of Political Economy, University of Chicago Press, vol. 128(3), pages 1065-1147.
    4. Andrew E. Clark & Conchita D'Ambrosio & Marta Barazzetta, 2021. "Childhood circumstances and young adulthood outcomes: The role of mothers' financial problems," Health Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 342-357, February.
    5. Day Manoli & Nicholas Turner, 2018. "Cash-on-Hand and College Enrollment: Evidence from Population Tax Data and the Earned Income Tax Credit," American Economic Journal: Economic Policy, American Economic Association, vol. 10(2), pages 242-271, May.
    6. Matti Sarvimäki & Hanna Pesola, 2022. "Intergenerational Spillovers of Integration Policies: Evidence from Finland’s Integration Plans," RF Berlin - CReAM Discussion Paper Series 2212, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    7. Klößner, Stefan & Pfeifer, Gregor, 2015. "Synthesizing Cash for Clunkers: Stabilizing the Car Market, Hurting the Environment," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113207, Verein für Socialpolitik / German Economic Association.
    8. Pesola, Hanna Onerva & Sarvimäki, Matti, 2022. "Intergenerational Spillovers of Integration Policies: Evidence from Finland’s Integration Plans," IZA Discussion Papers 15310, Institute of Labor Economics (IZA).
    9. Clark, Andrew E. & D’Ambrosio, Conchita & Barrazzetta, Marta, 2019. "Childhood circumstances and young adult outcomes: the role of mothers' financial problems," LSE Research Online Documents on Economics 102630, London School of Economics and Political Science, LSE Library.
    10. Dario Laudati & M. Hashem Pesaran, 2023. "Identifying the effects of sanctions on the Iranian economy using newspaper coverage," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 38(3), pages 271-294, April.
    11. Bryan A. Stuart, 2022. "The Long-Run Effects of Recessions on Education and Income," American Economic Journal: Applied Economics, American Economic Association, vol. 14(1), pages 42-74, January.
    12. Peter Backus & Thien Nguyen, 2021. "The Effect of the Sex Buyer Law on the Market for Sex, Sexual Health and Sexual Violence," Economics Discussion Paper Series 2106, Economics, The University of Manchester.
    13. Martha J. Bailey & Hilary W. Hoynes & Maya Rossin-Slater & Reed Walker, 2020. "Is the Social Safety Net a Long-Term Investment? Large-Scale Evidence from the Food Stamps Program," NBER Working Papers 26942, National Bureau of Economic Research, Inc.
    14. Daniel Albalate & Germà Bel & Ferran A. Mazaira-Font, 2021. "Decoupling synthetic control methods to ensure stability, accuracy and meaningfulness," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(4), pages 549-584, December.
    15. Bruno Ferman & Cristine Pinto & Vitor Possebom, 2020. "Cherry Picking with Synthetic Controls," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(2), pages 510-532, March.
    16. Barseghyan, Gayane, 2019. "Sanctions and counter-sanctions : What did they do?," BOFIT Discussion Papers 24/2019, Bank of Finland, Institute for Economies in Transition.
    17. Giovanni Peri & Derek Rury & Justin C. Wiltshire, 2020. "The Economic Impact of Migrants from Hurricane Maria," NBER Working Papers 27718, National Bureau of Economic Research, Inc.
    18. Cavit Baran & Eric Chyn & Bryan A. Stuart, 2022. "The Great Migration and Educational Opportunity," Upjohn Working Papers 22-367, W.E. Upjohn Institute for Employment Research.
    19. Roy Cerqueti & Raffaella Coppier & Alessandro Girardi & Marco Ventura, 2022. "The sooner the better: lives saved by the lockdown during the COVID-19 outbreak. The case of Italy [Using synthetic controls: Feasibility, data requirements, and methodological aspects]," The Econometrics Journal, Royal Economic Society, vol. 25(1), pages 46-70.
    20. Bruno Ferman, 2021. "On the Properties of the Synthetic Control Estimator with Many Periods and Many Controls," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 116(536), pages 1764-1772, October.

    More about this item

    Keywords

    Educational Sciences; Oil & Gas; International Trade and Trade Rules; Energy Demand; Energy and Mining; Energy and Environment;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:9836. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.