TY  - JOUR
AU  - Frankenberg, Elizabeth
AU  - Thomas, Duncan
TI  - Human Capital and Shocks: Evidence on Education, Health and Nutrition
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 23347
PY  - 2017
Y2  - April 2017
DO  - 10.3386/w23347
UR  - http://www.nber.org/papers/w23347
L1  - http://www.nber.org/papers/w23347.pdf
N1  - Author contact info:
Elizabeth Frankenberg
University of North Carolina Chapel Hill
Carolina Population Center
123 W Franklin St.
Chapel Hill, NC 27599-8120
E-Mail: e.frankenberg@unc.edu

Duncan Thomas
Department of Economics
Duke University
Box 90097
Durham, NC 27708
Tel: 919/660-1803
Fax: 919/684-8974
E-Mail: d.thomas@duke.edu
M3  - presented at "The Economics of Asset Accumulation and Poverty Traps", June 28-29, 2016
AB  - Human capital, including health and nutrition, has played a key role in the literature on poverty traps. Economic shocks that affect human capital during early life are thought to translate into permanently reduced levels of human capital and, thereby, push individuals into poverty. Three potential concerns in this literature are explored with empirical evidence drawn from primary longitudinal survey data collected before and after two major shocks in Indonesia: the 1998 financial crisis and the 2004 Indian Ocean tsunami. First, it is very hard to identify shocks that are unanticipated and uncorrelated with other factors that affect human capital outcomes. Second, and related, there is abundant evidence that individuals, families and communities invest in strategies that are designed to mitigate the impact of such shocks. The nature and effectiveness of the myriad array of these behaviors vary with the context in ways that are not straightforward to measure or model. Third, the impacts of shocks on human capital outcomes in the short and longer-term may differ precisely because of the behavioral changes of individuals and their families so that drawing inferences about the longer-term impacts based on negative impacts in the short term can be very misleading. The picture of remarkable resilience that emerges from investigating the impacts of major shocks on child health and human capital in Indonesia is nothing short of stunning.
ER  -