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Cash Transfers, Negative Rainfall Shocks and Child Welfare in Ethiopia

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  • Kaleab Haile

Abstract

This study examines the role of cash transfers in mitigating the welfare impact of negative rainfall shocks on children in rural households. Household-level panel data, obtained from areas where Ethiopia’s Social Cash Transfer Pilot Programme operated, are merged with available climate data. The results from a two-way fixed effects model reveal that cash transfers significantly reduce the negative effect of drought on food consumption Z-score of children in beneficiary households. As the magnitude of drought increases, however, no difference in children’s FCS Z-score is found between beneficiary and non-beneficiary households. The study provides evidence for household food consumption-based coping strategies as a mechanism. As such, beneficiary households are able to avoid food consumption-destabilising coping strategies as long as the droughts they experience are not of high magnitude. The findings of this study offer policy-relevant insights into the extent to which cash transfers can buffer the adverse welfare impact of drought on children.

Suggested Citation

  • Kaleab Haile, 2022. "Cash Transfers, Negative Rainfall Shocks and Child Welfare in Ethiopia," Journal of African Economies, Centre for the Study of African Economies, vol. 31(5), pages 441-466.
  • Handle: RePEc:oup:jafrec:v:31:y:2022:i:5:p:441-466.
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    File URL: http://hdl.handle.net/10.1093/jae/ejab029
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    More about this item

    Keywords

    Food security; consumption smoothing; two-way fixed effects; Ethiopia; JEL Classification: D13; I38; Q54;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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