Commodity Price Shocks and Child Outcomes: The 1990 Cocoa Crisis in Cote d'Ivoire

We look at the drastic cut of the administered cocoa producer price in 1990 Cote d'Ivoire and study to which extent cocoa producers' children suffered from this severe aggregate shock in terms of school enrollment, labor, height stature and morbidity. Using pre-crisis (1985-88) and post-crisis (1993) data, we propose a difference-in-difference strategy to identify the causal effect of the cocoa shock on child outcomes, whereby we compare children of cocoa-producing households and children of other farmers living in the same district or the same village. This causal effect is shown to be rather strong for the four child outcomes we examine. Hence human capital investments are definitely procyclical in this context. We also argue that the difference-in-difference variations can be interpreted as private income effects, likely to derive from tight liquidity constraints.