Friends of the Behavioral Economics Blog, this week we present the paper “The effects of negative economic shocks at birth on adolescents’ cognitive outcomes and educational attainment in Malawi”, by Kämpfen, F.; Zahra, F.; Kohler, H. P. and Kidman, R. (2022), in which authors conduct a study to find out how the economic and social impacts we receive at birth or in early childhood affect the cognitive and educational development of adolescents, specifically in the context of Malawi.
Prenatal and early childhood conditions are critical to long-term human capital development. Previous studies have shown that both extreme and subtle shocks, in utero and during the early months and years of childhood, can have lasting effects on children’s later educational performance and health.
These negative impacts can affect children through biological and social pathways that determine educational and cognitive outcomes. For example, prenatal and postnatal undernutrition can impair brain development. In addition, it can reduce the investment parents make in maternal, infant, or both maternal and infant nutrition, and thus affect long-term cognitive outcomes.
All of this helps to form a small environment in which poor fetal and infant cognitive development takes place, setting the stage for later development.
There is little evidence on how multiple and frequent negative shocks, common in households in low-income country contexts, affect children and adolescents. And there is even less evidence located in sub-Saharan Africa.
Thus, authors ask several questions: do multiple negative shocks affect adolescents’ educational performance?; do the effects differ by gender?; and do investments in nutrition and education mediate the relationship between economic shocks and adolescent cognitive outcomes?
Before explaining how the study was conducted, a brief review of the existing literature is in order.
Studies establish that the prenatal environment can affect the fetus, with short- and long-term consequences for its health. This is based on the assumption that human capital development is linked throughout the life course. A shortage of investment during this critical period, for example, as a result of negative shocks that harm a household, can be harmful for later decades.
Thus, children with unfavorable prenatal or early childhood conditions may not only suffer worse outcomes in later periods of their lives in multiple areas, but may also have a lower return on the investment made in them because of their disadvantages.
Gestational and early childhood shocks can affect through biological and social pathways. For example, these shocks can result in low birth weight, which is associated with poorer health in childhood and adolescence. On the other hand, in the social domain, parental preferences may determine investments in child health and education in response to a shock.
The analysis is based on the Adverse Childhood Experiences (ACE) project of the Malawi Longitudinal Study of Families and Health (MLSFH). Data were collected from rural areas, specifically from three districts in Malawi: Mchinji, Rumphi, and Balaka, which relative to other districts in the area, are not among the most disadvantaged, but are at the midpoint. The sample included a total of 1,559 adolescents, for whom information is available on whether their household experienced economic shocks in the year they were born.
Authors found that two or more moderate economic shocks in the year of birth negatively affect adolescents’ educational and cognitive outcomes, although there is not the same pattern for boys as for girls, with a greater disadvantage for the latter.
The study supports the policies aimed at alleviating social, gender and educational inequalities in Malawi and sub-Saharan Africa in general. Although the gender gap has been narrowed in recent years, overall elementary school completion remains low. Despite apparent gender equality in education, dropout pathways are also highly gendered: boys often drop out for work, girls for pregnancy.
Evidence of the detrimental impact on cognitive development should imply greater investment in the health and well-being of pregnant mothers, while an educational investment should also be contemplated to improve school conditions for children.
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