Death and schooling decisions over the short and long run in rural Madagascar

This paper provides strong evidence that adult mortality has a negative impact on children educational outcomes, both over the short and the long run, in rural Madagascar. The underlying longitudinal data and the difference-in-differences strategy used overcome most of the previous cross-sectional study limitations, such as failure to control for child and household pre-death characteristics and unobserved heterogeneity. This paper also pays special attention to the heterogeneity, robustness, and long-run persistence of effects. Results show that orphans are on average 10 pp less likely to attend school than their nonorphaned counterparts, this effect being even more pronounced for girls and young children from poorer households. Results on adults further show that those orphaned during childhood eventually completed less education. These findings suggest that not only do households suffering unexpected shocks resort to schooling adjustments as an immediate risk-coping strategy, but also that adversity has long-lasting effects on human capital accumulation. Copyright Springer-Verlag Berlin Heidelberg 2014