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Natural disasters, self-insurance and human capital investment : evidence from Bangladesh, Ethiopia and Malawi

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  • Yamauchi, Futoshi
  • Yohannes, Yisehac
  • Quisumbing, Agnes

Abstract

This paper examines the impacts of disasters on dynamic human capital production using panel data from Bangladesh, Ethiopia, and Malawi. The empirical results show that the accumulation of biological human capital prior to disasters helps children maintain investments in the post-disaster period. Biological human capital formed in early childhood (long-term nutritional status) plays a role of insurance with resilience to disasters by protecting schooling investment and outcomes, although disasters have negative impacts on investment. In Bangladesh, children with more biological human capital are less affected by the adverse effects of floods, and the rate of investment increases with the initial human capital stock in the post-disaster recovery process. In Ethiopia and Malawi, where droughts are rather frequent, exposure to highly frequent droughts in some cases reduces schooling investment but the negative impacts are larger among children embodying less biological human capital. Asset holdings prior to the disasters, especially the household's stock of intellectual human capital, also helps maintain schooling investments at least to the same degree as the stock of human capital accumulated in children prior to the disasters.

Suggested Citation

  • Yamauchi, Futoshi & Yohannes, Yisehac & Quisumbing, Agnes, 2009. "Natural disasters, self-insurance and human capital investment : evidence from Bangladesh, Ethiopia and Malawi," Policy Research Working Paper Series 4910, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4910
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    References listed on IDEAS

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    1. How to insure against natural disasters in the absence of insurance
      by Economic Logician in Economic Logic on 2009-05-19 01:15:00

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    Cited by:

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    2. Tim Lohse & Julio R. Robledo & Ulrich Schmidt, 2012. "Self‐Insurance and Self‐Protection as Public Goods," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 79(1), pages 57-76, March.
    3. Lisa Cameron & Manisha Shah, 2015. "Risk-Taking Behavior in the Wake of Natural Disasters," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 484-515.
    4. Anh Duc Dang, 2012. "On the Sources of Risk Preferences in Rural Vietnam," ANU Working Papers in Economics and Econometrics 2012-593, Australian National University, College of Business and Economics, School of Economics.
    5. Mueller, Valerie & Quisumbing, Agnes, 2010. "Short- and long-term effects of the 1998 Bangladesh flood on rural wages," IFPRI discussion papers 956, International Food Policy Research Institute (IFPRI).
    6. Dang, Duc Anh, 2012. "On the sources of risk preferences in rural Vietnam," MPRA Paper 38058, University Library of Munich, Germany.
    7. Dang, Duc Anh, 2012. "On the sources of risk preferences in rural Vietnam," MPRA Paper 38738, University Library of Munich, Germany.
    8. Eva Deuchert & Christina Felfe, 2013. "The Tempest: Natural Disasters, Early Shocks and Children's Short- and Long-Run Development," CESifo Working Paper Series 4168, CESifo.

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    Keywords

    Natural Disasters; Hazard Risk Management; Access to Finance; Economic Theory&Research; Health Monitoring&Evaluation;
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