Gone With the Wind? Hurricane Risk, Fertility and Education

Claus Pörtner

Working Papers from University of Washington, Department of Economics

Abstract: Despite a large literature on fertility and education there has been little research on how these joint decisions are affected by risks and shocks. This paper uses data on hurricanes in Guatemala combined with a household survey to analyse how households' decisions on fertility and investments in education respond to both risk and shocks. The data on hurricanes cover the period 1880 to 1997 and allow for the calculation of hurricane risk by municipality. An increase in risk leads to higher fertility for households with land, while households without land reduce fertility. For both types of households higher risk is associated with higher education but the effect is largest for households without land. Negative shocks lead to decreases in both fertility and education. There is a compensatory effect later in life for fertility, but not for education, indicating that births "lost" to shocks can be made up but lost schooling cannot. The most convincing explanation for these patterns is parents' need for insurance.

Date: 2006-10, Revised 2008-02
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