Internet Appendix: The tempest: Using a natural disaster to evaluate the link between wealth and child development

Christina Felfe and Eva Deuchert

No 1146A, Economics Working Paper Series from University of St. Gallen, School of Economics and Political Science

Abstract: How does family wealth affect children's development in the short- and long-run? We address this question by exploiting a shock occurred to family’s real estate, i.e. housing damages caused by a super typhoon. Our identification strategy is based on a comparison of children, who all lived in the same local area and thus were confronted with the same macro-economic shock, but only some experienced housing damages. We present evidence in favor of housing damages being essentially a severe wealth shock, with no effects on other observable channels which might directly harm children’s development. The shock results in a decline of educa-tional investments, but not of health-related investments. We observe a deterioration of chil-dren’s educational achievements in the short-run and even more pronounced in the long-run. Our findings are mainly driven by children whose families are at the bottom of the wealth distribution or lack the support of a strong family network.

Keywords: Child development; wealth effects; natural disaster (search for similar items in EconPapers)
JEL-codes: I14 I24 Q54 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2011-12
New Economics Papers: this item is included in nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:usg:econwp:2011:46a

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