Economic shocks and child welfare: the effect of past economic shocks on child nutritional achievements, schooling and work in rural and urban Ethiopia

Using data from the Young Lives younger cohort, we examine the effect of economic shocks on nutritional achievement, schooling and child work of index children (at age 5), controlling for various individual and household characteristics. Shocks that occurred both before and after the child was born are considered. Data used was from the Round 1 and Round 2 surveys, collected in the third quarter of 2002 and 2006 respectively. The most serious shocks reported to have occurred before the child’s birth are: (1) decrease in food availability; (2) crop failure; (3) death of livestock; (4) severe illness or injury; (5) loss of job/source of income/family enterprise; (6) birth of new household member’ (7) death of a household member. Although they have less perceived impact on child welfare, other shocks reported included crime, divorce or separation of family, paying for child's education, and migration of family members. Shocks that occurred after the child’s birth included: (1) illness and death of household member; (2) drought; (3) crop failure; (4) pests and diseases; (5) shutdown of place of employment or job loss; (6) natural disasters such as drought and flooding; (7) divorce or separation; (8) death of livestock; (9) increased input prices; (10) decreased output prices; (11) theft and robbery; (12) having to pay for education; and (13) birth of a new household member. We found a significant effect of shocks on nutrition. Not only shocks that occurred after the child was born but those that happened up to five years before the child was born, signalling the longterm consequence of shocks on child growth. On the other hand, recent shocks have more negative impacts on child schooling and work than shocks that occurred some time ago.