Persistent Agricultural Shocks and Child Poverty: Evidence from Ethiopia

Abstract

This study shows how persistent agricultural shocks in Ethiopia affect education, health and labour outcomes through a time-use study of young people, aged 0-22. Leveraging five rounds of the Young Lives Study from 2002-2016, we use dynamic panel instrumental variable regressions to account for the unobserved heterogeneity and serial correlation in the estimation of persistent shocks. Agricultural shocks significantly reduce schooling participation and time spent in schooling, deteriorate health, and increase both labour force participation and labour time. Household wealth acts as a buffer and mitigates the adverse effects of shocks on schooling. Interestingly, children from wealthier households have a higher likelihood of joining agricultural labour during shocks, but their intensity of child labour is significantly lower compared to the poorer households. The study recommends agricultural insurance for the poor and incentives for school participation in areas susceptible to agricultural shocks. Show more