Extreme Weather and Poverty Risk: Evidence from Multiple Shocks in Mozambique

34 Pages Posted: 7 Dec 2018 Last revised: 8 Dec 2018

See all articles by Javier Eduardo Baez

Javier Eduardo Baez

World Bank; IZA Institute of Labor Economics

German Daniel Caruso

World Bank

Chiyu Niu

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

Date Written: December 6, 2018

Abstract

This paper investigates the effects of multiple weather shocks on household welfare in Mozambique, as well as some of the coping responses and price mechanisms at play. The analysis employs a triple-difference strategy that exploits variation in the shocks across space, time, and cropping cycles. The findings demonstrate high levels of vulnerability across various weather risks. Experiencing a cyclone, flood, or drought leads to a drop of up to 25-30 percent in per capita food consumption and around 0.4 fewer meals per day per person. Poverty increased by 12 and 17.5 percentage points in two of the three events analyzed. Human capital accumulation, as measured by school participation and morbidity, is disrupted. Households follow risk-coping strategies, such as increasing the labor supply of their children or selling assets, which entail partial protection in the aftermath of the shock at the cost of lower income growth in the future. In disentangling the channels, the paper shows that maize prices exhibit higher volatility in food markets that are spatially close to the most affected areas. The results are robust to several robustness checks, including analysis of bias from selective migration, and indicate that household welfare and economic mobility in low-income environments are constrained by uninsured weather risks.

Keywords: Natural Disasters, Inequality, Climate and Meteorology, Health Care Services Industry, Food Security

Suggested Citation

Baez, Javier Eduardo and Caruso, German Daniel and Niu, Chiyu, Extreme Weather and Poverty Risk: Evidence from Multiple Shocks in Mozambique (December 6, 2018). World Bank Policy Research Working Paper No. 8667, Available at SSRN: https://ssrn.com/abstract=3297323

Javier Eduardo Baez (Contact Author)

World Bank ( email )

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IZA Institute of Labor Economics ( email )

P.O. Box 7240
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Germany

German Daniel Caruso

World Bank

1818 H Street, NW
Washington, DC 20433
United States

Chiyu Niu

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics ( email )

1301 W. Gregory Drive
Urbana, IL 61801
United States

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