Transitory shocks and long-term human capital accumulation: the impact of conflict on physical health in Peru

Abstract

The recent literature on human capital highlights the importance of investments during the first few years after birth as a determinant of economic_x000D_ outcomes later in life, including labour productivity. This paper assesses_x000D_ the relationship between conflict exposure –a transitory, aggregate, shock–_x000D_ and early nutrition. The relationship between conflict exposure and human_x000D_ capital outcomes can be put into doubt due to the endogenous nature of_x000D_ conflict. In this paper I use a rich dataset that permits me to trace the_x000D_ intensity of a country-specific, large-scale, conflict across regions and over_x000D_ time at the monthly frequency over a 20-year period. I use this data to link_x000D_ conflict exposure prevalent around the time of birth to child-level outcomes_x000D_ of birth cohorts born over an analogous time period. The identification_x000D_ strategy exploits differences in the intensity of exposure between siblings in_x000D_ turn determined by year-month of birth. Results show that, on average,_x000D_ early exposure to conflict did not have an effect on infant mortality but had_x000D_ large negative effects on short-term nutritional outcomes, particularly for_x000D_ the poor. These results suggest that, unless compensatory investments were_x000D_ at place, the Peruvian conflict might have had long-term effects on human_x000D_ capital accumulation through a nutritional channel.