Ms Bernal and Dr Vlaicu combine rainfall data and household survey results to examine how rural Colombian families respond to income shocks produced by unexpected weather events. In particular, they investigate the “inter-temporal trade-off” that households face between sending children to school (a long-term investment) and keeping them at home to do household chores or work in family enterprises (short-term focus).
Previous research has found evidence that when households experience sudden decreases in income or losses of assets they often take their children out of school so the children can work instead. The results of this paper reinforce these findings with evidence that in response to sudden heavy rainfall in rural communities, “the probability that a child works increases considerably, and to a smaller degree, child involvement in household chores [increases], while the probability that a child attends school decreases.”
Households that held loans prior to the rainfall shock were more likely to take children out of school so they can help earn money to repay the family’s loans on time. On the other hand, households with access to asset insurance, remittances from family abroad, or natural disaster aid from institutions or social networks were better equipped to face shocks and less likely to increase their children’s workload.
Other avenues that can help keep children in school after extreme weather events include “ex post loan restructuring or ex ante payment flexibility in loan contracts.”
This is a summary of a paper by Carolina Bernal and Razvan Vlaicu, published by the Inter-American Development Bank (IDB), August 2023, 40 pages, available at https://publications.iadb.org/en/child-labor-rainfall-shocks-and financial-inclusion-evidence-rural-households.
By James Stevenson, Research Associate
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