Fertility after The Drought: Theory and Evidence from Madagascar

In communities highly dependent on rainfed agriculture for their livelihoods, the common occur-rence of climatic shocks such as droughts can lower the opportunity cost of having children, and raise fertility. Using longitudinal household data from Madagascar, we estimate the causal effect of drought occurrences on fertility, and explore the nature of potential mechanisms driving this effect. We exploit exogenous within-district year-to-year variation in rainfall deficits, and find that droughts occurring during the agricultural season significantly increase the number of children born to women living in agrarian communities. This effect is long lasting, as it is not reversed within four years following the drought occurrence. Analyzing the mechanism, we find that droughts have no effect on common underlying factors of high fertility such as marriage timing and child mortality. Furthermore, droughts have no significant effect on fertility if they occur during the non-agricultural season or in non-agrarian communities, and their positive effect in agrarian communities is mitigated by irrigation. These findings provide evidence that a low opportunity cost of having children is the main channel driving the fertility effect of drought in agrarian communities.