Hurricane Mitch, Family Budgets and Schooling in Nicaragua

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 18.04.2006, 12:15 - 13:30


Presentation by 

Manuelita Ureta (Texas A&M University)


Hurricane Mitch hit Nicaragua in November of 1998. I exploit the opportunity afforded by Mitch to measure the impact of a truly exogenous change in the family budget on children’s and teenagers’ advancement through the school system, and also examine the palliative role of remittances. Mitch spared some areas of Nicaragua; families residing in those areas serve as control group in this “natural” experiment. In rural areas, between the years 1998 and 2001, the estimated survival function for school enrollment for the “treated” children improves less than for the control group at every grade level from grades 1 through 6. While rural incomes of the treated families had recovered by 2001, the stagnation in income growth in the aftermath of the hurricane apparently had a lasting effect on school retention for rural children. In urban areas, the survival functions decline roughly equally for the treatment and control groups, despite considerable growth in incomes by 2001.

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