Remember when it rained – Schooling responses to shocks in India

Despite long-standing international agreements like the Millennium Development Goals, 264 million children in developing countries are not enrolled in school, and children in rural areas remain twice as likely to be out of school as children in urban areas. One potential explanation for this pattern is that children’s education in rural areas is vulnerable to weather shocks, but there is no consensus about whether rainfall shocks help or harm school enrollment in the existing literature. This paper explores whether changes in the relationship between rainfall shocks and schooling outcomes over time can explain the different results in the literature by using household survey data from India across three decades. My study finds that adverse rainfall shocks have an increasingly stronger positive impact on school enrollment over time, whereas enrollment is increasingly falling after positive rainfall shocks. This effect is stronger for girls than for boys, more pronounced for older children, and is consistent with an increase in the importance of opportunity costs of a child’s time in more recent years. Children may have to drop out of school when employment opportunities are more readily available after a positive rainfall shock, but are able to go to school when jobs are scarce. These results offer a potential explanation for the different results in the literature, where studies on countries with higher economic development tend to find results consistent with an opportunity cost story, whereas this is not the case for studies on countries with a lower level of development. The results suggest that policymakers need to pay close attention to the obstacles faced by girls and older children to make access to education universal, and should develop policy tools that incentivize households to send their children to school even when employment opportunities are readily available.