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Price Shocks and Human Capital: Timing Matters

Research output: Contribution to Journal/Magazine › Journal article › peer-review

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Price Shocks and Human Capital: Timing Matters. / Beshir, Habtamu; Maystadt, Jean-Francois.
In: Economic Development and Cultural Change, Vol. 72, No. 4, 31.07.2024, p. 1567-1583.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Beshir, H & Maystadt, J-F 2024, 'Price Shocks and Human Capital: Timing Matters', Economic Development and Cultural Change, vol. 72, no. 4, pp. 1567-1583. https://doi.org/10.1086/724388

APA

Beshir, H., & Maystadt, J.-F. (2024). Price Shocks and Human Capital: Timing Matters. Economic Development and Cultural Change, 72(4), 1567-1583. https://doi.org/10.1086/724388

Vancouver

Beshir H, Maystadt JF. Price Shocks and Human Capital: Timing Matters. Economic Development and Cultural Change. 2024 Jul 31;72(4):1567-1583. doi: 10.1086/724388

Author

Beshir, Habtamu ; Maystadt, Jean-Francois. / Price Shocks and Human Capital : Timing Matters. In: Economic Development and Cultural Change. 2024 ; Vol. 72, No. 4. pp. 1567-1583.

Bibtex

@article{1d4e83e38cdb4f99bf6260706307e712,
title = "Price Shocks and Human Capital: Timing Matters",
abstract = "The effect of economic shocks on human capital is theoretically ambiguous due to opposing income and substitution effects. Using child-level information on schooling, child labor, and cognitive development, we investigate the effect of cocoa price fluctuations on human capital production in Ghana. We demonstrate that the timing of the price shock matters. For school-aged children, the substitution effect dominates: a price boom decreases schooling and increases child labor. An increase of 1 standard deviation in the current-year real producer price of cocoa significantly decreases current school attendance by 8.6 percentage points and the likelihood of being in the correct grade in the following year by 5.5 percentage points. For preschool-aged children, however, the income effect dominates: early-life and in utero booms in the real producer price of cocoa significantly increase Raven/IQ scores and grade attainment.",
keywords = "Ghana, Cocoa Price Shocks, Child Labour, Schooling, Cognitive Development, Human Capital",
author = "Habtamu Beshir and Jean-Francois Maystadt",
year = "2024",
month = jul,
day = "31",
doi = "10.1086/724388",
language = "English",
volume = "72",
pages = "1567--1583",
journal = "Economic Development and Cultural Change",
issn = "0013-0079",
publisher = "University of Chicago",
number = "4",

}

RIS

TY - JOUR

T1 - Price Shocks and Human Capital

T2 - Timing Matters

AU - Beshir, Habtamu

AU - Maystadt, Jean-Francois

PY - 2024/7/31

Y1 - 2024/7/31

N2 - The effect of economic shocks on human capital is theoretically ambiguous due to opposing income and substitution effects. Using child-level information on schooling, child labor, and cognitive development, we investigate the effect of cocoa price fluctuations on human capital production in Ghana. We demonstrate that the timing of the price shock matters. For school-aged children, the substitution effect dominates: a price boom decreases schooling and increases child labor. An increase of 1 standard deviation in the current-year real producer price of cocoa significantly decreases current school attendance by 8.6 percentage points and the likelihood of being in the correct grade in the following year by 5.5 percentage points. For preschool-aged children, however, the income effect dominates: early-life and in utero booms in the real producer price of cocoa significantly increase Raven/IQ scores and grade attainment.

AB - The effect of economic shocks on human capital is theoretically ambiguous due to opposing income and substitution effects. Using child-level information on schooling, child labor, and cognitive development, we investigate the effect of cocoa price fluctuations on human capital production in Ghana. We demonstrate that the timing of the price shock matters. For school-aged children, the substitution effect dominates: a price boom decreases schooling and increases child labor. An increase of 1 standard deviation in the current-year real producer price of cocoa significantly decreases current school attendance by 8.6 percentage points and the likelihood of being in the correct grade in the following year by 5.5 percentage points. For preschool-aged children, however, the income effect dominates: early-life and in utero booms in the real producer price of cocoa significantly increase Raven/IQ scores and grade attainment.

KW - Ghana

KW - Cocoa Price Shocks

KW - Child Labour

KW - Schooling

KW - Cognitive Development

KW - Human Capital

U2 - 10.1086/724388

DO - 10.1086/724388

M3 - Journal article

VL - 72

SP - 1567

EP - 1583

JO - Economic Development and Cultural Change

JF - Economic Development and Cultural Change

SN - 0013-0079

IS - 4

ER -