Long-Term Effects of Early Life Rainfall Shocks on Foundational Cognitive Skills: Evidence from Peru

Abstract

Global warming is changing precipitation patterns, particularly harming communities strongly tied to agricultural production or consumption, predominantly in low-and-middle income countries (LMICs). Whilst the long-term effects of being exposed to rainfall shocks early in life on school achievement tests are well-established, there is little population-based evidence from LMICs on the mechanisms through which these shocks operate. Executive functions (EF) are key for children´s learning abilities. This paper analyses the effects of early exposure to rainfall shocks on four foundational cognitive skills (FCSs), including EF that have been found to be key predictors of educational success. These skills were measured via a series of tablet-based tasks administered in Peru as part of the Young Lives longitudinal study (YLS). We combine the YLS data with gridded data on monthly precipitation to generate monthly, community-level rainfall estimates. The key identification strategy relies on temporary climatic shocks being uncorrelated with other latent determinants of FCSs development. Our results show significant negative effects of early life exposure to rainfall shocks on EF measured in later childhood. We also find evidence of rainfall shocks decreasing households’ abilities to invest in human capital, which may affect both FCSs and domain-specific test scores. A social policy providing poor households with additional financial resources partially offsets the effects of the rainfall shocks.

Keywords: Skills formation, Human capital, Rainfall, Peru, Early childhood