Essays on Early Life Shocks and Human Capital Production

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منو

" Essays on Early Life Shocks and Human Capital Production "
Beshir, Habtamu Ali Maystadt, Jean-François

Document Type	:	Latin Dissertation
Language of Document	:	English
Record Number	:	1109464
Doc. No	:	TLpq2472189057
Main Entry	:	Beshir, Habtamu Ali
	:	Maystadt, Jean-François
Title & Author	:	Essays on Early Life Shocks and Human Capital Production\ Beshir, Habtamu AliMaystadt, Jean-François
College	:	Lancaster University (United Kingdom)
Date	:	2019
student score	:	2019
Degree	:	Ph.D.
Page No	:	183
Abstract	:	In the last two decades Economists have become increasingly interested in connecting adulthood (as well as later childhood) conditions to in utero and early life experiences. This is following the fetal origins hypothesis (FOH), a theory that relates in utero nutritional deprivation to chronic health conditions in adulthood (Barker, 1990). More importantly, Economists extend the fetal origins hypothesis (FOH) literature to explore the effect of early life (not just prenatal) exposure to any shock (not just nutritional) on different outcomes (not just health) observed during the life cycle (not just adulthood). The FOH literature now exploits the effects of early life exposure to famine (Almond et al., 2010; Dercon and Porter, 2014; Chen and Zhou, 2007), natural disasters (Fuller, 2014), conflicts and wars (Akresh and De Walque, 2008; Akresh et al., 2017; Singhal, 2018), and disease epidemics (Almond, 2006; Lin and Liu, 2014) on health, cognitive, education and labour market outcomes. The literature used famine, natural disasters, conflicts and wars, and disease epidemics as a natural experiment to identify the causal effect of the early life circumstances on different childhood or adulthood outcomes. These shocks are dramatic and disastrous, yet, they are rare events. Recently, the related literature considers the impacts more moderate fetal shock. A typical example is the study of Ramadan exposure (Almond and Mazumder, 2011; Van Ewijk, 2011; Almond et al., 2015; Majid, 2015). This motivates the study of the second chapter of this thesis. In the this chapter, we study the impact of a regular and more moderate fetal shock: in utero exposure to seasonal food insecurity. In Ethiopia during the rainy/planting season households experience severe food shortages. In this study, we explore the impacts of in utero exposure to this seasonal food insecurity on maths and grade-for-age outcomes. Exploiting a unique dataset from the Young Lives Ethiopia study and applying a novel identification strategy, we estimate the effect of variation in the number of days of exposure to prenatal food insecurity on these cognitive development outcomes. We find that in utero exposure to food insecurity reduces maths and the odds of being on the correct grade. In addition, we are more interested to investigate if these effects are significantly different by gender. There are both biological (mortality selection and scarring effect that varies by gender) and behavioural (parental compensatory or reinforcing investment which may differ for sons and daughters) reasons to expect that these effects might be different by gender. We find that the effects of the exposure are significantly different for boys and girls. We argue (with supportive evidence) that boys are strongly affected by the shock due to the scarring effects that accumulate overtime. So, by studying the effects of exposure to a shock that many Ethiopians often experience, we contribute to an emerging literature seeking to identify the consequences of relatively mild, though frequent, shocks. Does human capital production respond positively (negatively) to economic booms (busts)? Theoretically, this is ambiguous due to opposing income and substitution effects. The empirical literature also documents heterogeneous effects of economic fluctuations on human capital investments in developing countries. For instance, Jensen (2000) and Beegle et al. (2006) find income effect dominates and, thus, human capital investment improves (declines) during booms (busts). However, Duryea et al. (2007), Kruger (2007) and Shah and Steinberg (2017) document the opposite, where schooling declines (increases) and child labour increases (decreases) during economic booms (busts). Age of children and the context of countries may explain part of these heterogeneous results. Exploiting rainfall variation overtime and across provinces in India, Shah and Steinberg (2017) document that income effect dominates for for young children while substitution effect is important for school age (older) children. In the third chapter of this thesis, I also consider the differential effect of real cocoa price fluctuations on human capital production of young and old children in Ghana. Ghana is one of the major exporters of cocoa to the world market. Cocoa is a key source of income and livelihood in cocoa producing regions of Ghana. In Ghana, primary school (also junior high school) is compulsory and free. However, Senior high school is expensive. Exploiting these facts and using Ghana Living Standard Surveys (GLSS1; GLSS2; GLSS3; GLSS4; GLSS5; and GLSS6), I test the effect of exposure to contemporaneous (school age) price shock on schooling outcomes. I find that children surveyed during cocoa price boom in cocoa producing regions are significantly less likely to attend school and more likely to engage in work. The effects are driven by impacts on primary and junior high school age children. With free education for primary and junior high children, only the substitution effect would be the driving force. Hence, cocoa price booms lead to less schooling. No effect is found for senior high school age children. With expensive cost of education for senior high children, not only substitution effect, but also income effect is at play here. The null effect found for this group may be as a result of the net effect of the two opposing forces being zero. So, substitution effect is dominant for old children as long as education cost is free. Moreover, Barker (1990) hypothesize that access to nutrition in utero important for fetal development. The empirical literature also documents that both short-term and long-term health and socio-economic outcomes are significantly affected by access to nutrition in utero (Hoynes et al., 2011, 2016; Black et al., 2007). Inspired by the fetal origins hypothesis (FOH), in the second part of the chapter, I tried to show the effects cocoa price fluctuations on young (in utero) children. In particular, I show how income effect (more investment in nutritious consumptions due to more income during economic booms, for instance) is dominant for young (in utero) children. Using Ghana Living Standards Survey round 2 (GLSS2, 1988/89) and Ghana Education Impact Evaluation Survey (GEIES, 2003), I test the effect of in utero real cocoa price fluctuation exposure on Raven/IQ test of children 9 to 17 years old. I find that in utero cocoa price boom significantly increases Raven/IQ score. In addition, exploiting the Ghana Living Standard Surveys (GLSS1; GLSS2; GLSS3; GLSS4; GLSS5; and GLSS6), I also estimate the impact of in utero price boom on grade attainment for children of ages 6 to 17. Higher in utero real producers price of cocoa increases grade attainment. Currently, not only the FOH literature is looking at the effect of shocks on outcomes of individuals exposed to the shock either in utero or early life, but also expanding to examining if the effects are transmitted through generations (Lee, 2014; Akresh et al., 2017). In chapter four, I study both first and second generation effects of early life exposure to the most intense aerial bombing episode in history: bombing Vietnam. I investigate the effects of the shock on the education and labour market outcomes of the first generation, and education outcomes of the second generation. I exploit 15% sample of the Vietnam Population and Housing Census and data on bombing intensity at province (also district) level. I find that exposure to bombing significantly reduces the education and labour market outcomes of the first generation. This could be due to school closure (or destruction) as a result of bombing, lack of nutrition due to food shortage or maternal stress due to the conflict. No effect is found on the second generation, though. This may be as a result of government’s effort in distributing more state investments to more bombed provinces that reached the second generation on time.
Subject	:	Developmental biology
	:	Developmental psychology
	:	Obstetrics