Cash Transfers, Negative Rainfall Shocks and Child Welfare in Ethiopia

Kaleab Haile

Journal of African Economies, 2022, vol. 31, issue 5, 441-466

Abstract: This study examines the role of cash transfers in mitigating the welfare impact of negative rainfall shocks on children in rural households. Household-level panel data, obtained from areas where Ethiopia’s Social Cash Transfer Pilot Programme operated, are merged with available climate data. The results from a two-way fixed effects model reveal that cash transfers significantly reduce the negative effect of drought on food consumption Z-score of children in beneficiary households. As the magnitude of drought increases, however, no difference in children’s FCS Z-score is found between beneficiary and non-beneficiary households. The study provides evidence for household food consumption-based coping strategies as a mechanism. As such, beneficiary households are able to avoid food consumption-destabilising coping strategies as long as the droughts they experience are not of high magnitude. The findings of this study offer policy-relevant insights into the extent to which cash transfers can buffer the adverse welfare impact of drought on children.

Keywords: Food security; consumption smoothing; two-way fixed effects; Ethiopia; JEL Classification: D13; I38; Q54 (search for similar items in EconPapers)
Date: 2022
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