Children's Vulnerability to Weather Shocks: A Natural Disaster as a Natural Experiment

In October 1998 Nicaragua was hit by Hurricane Mitch, one of the most powerful hurricanes to strike the tropical Atlantic basin in the 20th century. This study exploited the exogenous variation in the trajectory of the hurricane in a quasi-experimental design and showed that large and aggregated shocks, such as natural disasters, have adverse medium-run effects on children’s well-being, particularly in terms of health, nutrition, and labour force participation. Sick children in affected areas were 30 per cent less likely to be taken for medical consultation, even though there was no significant difference on the prevalence of illness between children in affected and non-affected areas. The probability of being undernourished almost quadrupled (an 8.7 percentage point increase) among children in regions hit by Mitch, and the overall distribution of their nutritional status significantly worsened as a result of the storm. While the study found no significant effect on school enrolment, labour force participation increased by 58 per cent (an increase of 8.5 percentage points) among children in areas affected by the hurricane. Similarly, the proportion of children simultaneously enrolled in school and working more than doubled due to Mitch, from 7.5 per cent to 15.6 per cent. Evidence also suggests that children were disproportionately affected by the shock, as the nutritional status of mothers and adult consumption in affected areas were largely unchanged by the storm. This behavioural response has implications for the nature of the resource allocation process in the household. Study results did not seem to be driven by a declining trend in investments in children prior to the shock, and were robust to different sub-samples and specifications, as well as to parametric and nonparametric estimation methods.