Persistent Agricultural Shocks and Child Poverty: Evidence from Ethiopia

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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.

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