Currency Crises and Malnutrition

This paper investigates the effects on children and adult height of currency crises experienced during childhood. It uses survey data from Demographic and Health Surveys (DHS) collected in 57 countries between 1986 and 2023 for hundreds of thousands of children and adults, combined with a monthly dataset indicating the start of currency crises between 1970 and 2017. It finds that children facing a currency crisis between their birth and the date of the survey tend to be shorter, by about - 0.1 standard deviation (SD). Reduced food affordability explains part of the results: estimated effects are larger in net food importing developing countries and smaller when controlling for inflation. Children growing up during a currency crisis are less likely to eat any solid food and to have a diversified diet on the day preceding the survey, mostly because of a reduced consumption of nutrient-rich non-starchy food. Early exposure to currency crises have persistent effects on adult height. Adults having faced a currency crisis between their birth and 10 years old are on average shorter than their peers, with a maximum effect of about -0.04 SD for crises experienced between 5-6 years old. They are also less likely to have completed secondary or higher education. Our results are unlikely to be influenced by differential selection in parenting across households’ wealth levels, and are robust to a large number of alternative specifications and sample restrictions.