Exposure, Contemporaneousness and the Effect of Droughts on Children's Cognitive Development

Abstract

In this paper, we combine a comprehensive Indonesian household survey with detailed meteorological data to explore what can be learned about the effect of drought on the long term cognitive development of Indonesian children living in rural areas. We face a common problem of latent exposure with observable contemporaneousness. The problem is compounded by plausible endogeneity and likely confounding. To estimate the effects of drought on Indonesian children's scores in a fluid intelligence test, we consider a battery of different identification assumptions which vary in credibility and power. Our most powerful assumptions point identify the effect of contemporaneousness, however they have debatable credibility. Our most credible assumptions, on the other hand, convey little information about the effect of contemporaneousness. In between these two extreme, we consider a range of middle-of-the-way assumptions which partially identify the effect of contemporaneousness. Specifically, we characterise some of the assumptions required to establish the sign of the effect of contemporaneousness. Our results reveal differential effects of drought across sexes, however we find at least two competing explanations which would explain these difference: natural selection, on the one hand, and family dis-investing on girls in the fact of hardship, on the other.