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Human Capital and Shocks: Evidence on Education, Health, and Nutrition

In: The Economics of Poverty Traps

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  • Elizabeth Frankenberg
  • Duncan Thomas

Abstract

Human capital, including health and nutrition, has played a key role in the literature on poverty traps. Economic shocks that affect human capital during early life are thought to translate into permanently reduced levels of human capital and, thereby, push individuals into poverty. Three potential concerns in this literature are explored with empirical evidence drawn from primary longitudinal survey data collected before and after two major shocks in Indonesia: the 1998 financial crisis and the 2004 Indian Ocean tsunami. First, it is very hard to identify shocks that are unanticipated and uncorrelated with other factors that affect human capital outcomes. Second, and related, there is abundant evidence that individuals, families and communities invest in strategies that are designed to mitigate the impact of such shocks. The nature and effectiveness of the myriad array of these behaviors vary with the context in ways that are not straightforward to measure or model. Third, the impacts of shocks on human capital outcomes in the short and longer-term may differ precisely because of the behavioral changes of individuals and their families so that drawing inferences about the longer-term impacts based on negative impacts in the short term can be very misleading. The picture of remarkable resilience that emerges from investigating the impacts of major shocks on child health and human capital in Indonesia is nothing short of stunning.
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Suggested Citation

  • Elizabeth Frankenberg & Duncan Thomas, 2017. "Human Capital and Shocks: Evidence on Education, Health, and Nutrition," NBER Chapters, in: The Economics of Poverty Traps, pages 23-56, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:13829
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    References listed on IDEAS

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    3. Debebe,Zelalem Yilma & Raju,Dhushyanth, 2020. "Covariate Shocks and Child Undernutrition : A Review of Evidence from Low- and Middle-Income Countries," Policy Research Working Paper Series 9273, The World Bank.
    4. Font-Gilabert, Paulino, 2020. "Taking cover: human capital accumulation in the presence of shocks and health insurance," ISER Working Paper Series 2020-16, Institute for Social and Economic Research.
    5. Maria Micaela Sviatschi, 2019. "Making a Narco: Childhood Exposure to Illegal Labor Markets and Criminal Life Paths," Working Papers 2019-28, Princeton University. Economics Department..
    6. Carletto, Calogero & Maluccio, John A. & Shrestha, Savant Man & Stewart, Mackenzie F., 2021. "Migration, economic crisis and child growth in rural Guatemala: Insights from the Great Recession," Food Policy, Elsevier, vol. 104(C).
    7. Pierre-Emmanuel Darpeix, 2019. "Literature review on the consequences of food price spikes and price volatility," Working Papers hal-02072329, HAL.
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    9. Pierre-Emmanuel Darpeix, 2019. "Literature review on the consequences of food price spikes and price volatility," PSE Working Papers hal-02072329, HAL.

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    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I2 - Health, Education, and Welfare - - Education
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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