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The Human Capital Legacy of a Trade Embargo

Listed author(s):
  • Abhishek Chakravarty
  • Matthias Parey
  • Greg C. Wright

We estimate the effects of in-utero exposure to a trade embargo on survival and human capital in an import-dependent developing country. Using a sharp regression discontinuity design, we show that a nearly comprehensive embargo imposed by India on Nepal in 1989 led to a close to 30 percent decrease in reported live births the month after it began. Adult survivors of exposure have more education and earn 30% higher monthly income compared to unexposed cohorts. The regional variation in post-embargo income is consistent with a model that combines internal and external trade costs with non-homothetic preferences.

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File URL: https://ideas.repec.org/jmp/2017/pch906.pdf
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Paper provided by Job Market Papers in its series 2017 Papers with number pch906.

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Date of creation: 24 Oct 2017
Handle: RePEc:jmp:jm2017:pch906
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