Under the Weather: Health, Schooling, and Economic

Consequences of Early-Life Rainfall

The American Economic Review, 2009

S. Maccini

D. Yang

October 12, 2016

Alessandra Stampi-Bombelli, Aurelien Strenta

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Research Question and Motivation

Outline

Research Question and Motivation

Data

Estimation

Results and Conclusions

Comments and Critics

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Research Question and Motivation

Research Question

Does early-life rainfall in rural Indonesia have long run effects on adult
outcomes such as health, education, and socio-economic status?
Higher early-life rainfall has large positive effects on adult
outcomes of women
Why women not men?

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Research Question and Motivation

Research Question

Does early-life rainfall in rural Indonesia have long run effects on adult
outcomes such as health, education, and socio-economic status?
Higher early-life rainfall has large positive effects on adult
outcomes of women
Why women not men? Gender bias: discrimination in the allocation
of nutrition and other resources of a household
Channels

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Research Question and Motivation

Rainfall main driver of agriculture

Why rainfall? In Indonesia, temperature is stable, and variation in output
is mainly due to variations in rainfall

Source: Weatheronline.co.uk
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Research Question and Motivation

Long run effects of rainfall shocks

rainfall
t=0
birth

crops
food

HH income
medicine

outcome
t=T
adult

Outcomes:
Self-reported health

Expenditure per capita

Height

Asset index

Years of schooling

Annual earnings

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Research Question and Motivation

Motivation
Why should we care?

October 11, International Day of the Girl Child

Only when investments in programs for girls on issues that particularly
affect them [...] are complemented with corresponding investments in data
on girls, can we make real progress towards greater accountability in
domains of critical importance to them.
The United Nations
Gender bias
Justification of policies for normal/typical environmental variations
(as opposed to extreme events) that might affect whole population
Persistent effect of early-life conditions: critical period programming

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Data

Data
Household data:
Indonesia Family Life Survey (place/month of birth, health records)
Sample: 4615 women and 4277 men born between 1953-1974
Outcomes measured in 2000 individuals aged 26-47
Individuals born in rural areas (rainfall has an effect on agriculture)
166 districts

Rainfall data:
Global Historical Climatology Network (GHCN) Precipitation and
Temperature Data
Monthly records of rainfall data for each station
Each birth district matched with closest weather location

For more information on data click

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here

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Estimation

Setting up
Rainfall

Rainfall in ones year of birth: Sum of the rainfall during wet and
dry season, in year of birth of an individual
How to measure rainfall?
Rainfall: measured at the rainfall station closest to the district where
the individual was born in the birthyear
Rainfall variable: percentage deviation of birthyear rainfall from
average rainfall in district j
Rj,t = ln(birthyear rainfallj,t ) ln(mean annual rainfallj )

* mean calculated over years 1953-1999

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Estimation

The Model
Identification Issues

Identification Strategy: E (Rjt ijst ) = 0 ?

1

Rainfall measurement error: imperfect correlation between rainfall

measured at nearest station and the rainfall at the exact place of birth
more
downward bias
Solution: Instrument rainfall measured by closest station with 2nd-5th
closest rainfall stations
Strong instrument! F-statistic=30

Misreporting of birth month: No solution. IV estimates understate

the true empirical relationship

To know more about IV estimation click

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Estimation

The Model
Empirical specification

Yijst = Rjt + js + js TREND + st + ijst

Yijst : Outcome for adult i, born in district j, in season s at year t

Rjt : Birthyear rainfall for district j and year t
: Effect of birthyear rainfall on the adult outcome
js : Fixed effect for individuals born in district j at season s
st : Fixed effect for the birthyear-season combination
js Effect of time specific trend
TREND: Linear time trend specific to the district-season

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Estimation

Specification in Results

Figure: Adult Outcomes on Rainfall in Birth District and Birth Year

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Results and Conclusions

Results
Table: Effect of birthyear rainfall on adult outcome, individuals born 53-74 using
IV for birthyear-district rainfall.
Independent variable:
birthyear-district rainfall
Women
Men

Dependent Variables:

Self-rep. health status very good

Self-rep. health status poor/very poor
Height (cm.)
Completed grades of schooling
Asset index

0.101
(0.058)*
-0.192
(0.082)**
2.832
(0.821)***
1.086
(0.453)**
0.876
(0.324)**

-0.029
(0.072)
-0.100
(0.098)
0.998
(1.795)
-0.474
(1.490)
-0.279
(0.507)

*** Significant at 1 % level, ** Significant at 5 % level, * Significant at 10 % level

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Results and Conclusions

Endogeneity

Measurement error
Rainfall IV
Non-reported birth

Reverse causality
Is rainfall really exogenous?

Omitted variable bias

Rainfall shocks before/after birth could be affecting LR outcomes

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Results and Conclusions

Results II
Omitted variable bias

Problem: if rainfall is serially correlated over time, it could be rainfall

before/after birth that affects outcomes
Solution: they control for the effect of rainfall on adult outcomes
from years -3 to 3
Coefficients on birthyear remain almost unchanged
Conclusion: rainfall matters per se, no evidences that shocks in-utero
influence the results
Supporting evidence for gender bias hypothesis (absence of of
technologies to determine gender)

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Results and Conclusions

Results III
The pathways to adult socio-economic status

Chain of causation leading to improved socio-economic status:

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Results and Conclusions

Results III
The pathways to adult socio-economic status

Chain of causation leading to improved socio-economic status:

birthyear
rainfall

infant girl
health

education
adult health

socio-economic
status

How to measure it and what are the outcomes?

Regress the asset index on birthyear rainfall for the female sample and
compare when including controls as adult health and education.
The results?

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Results and Conclusions

Results III
The pathways to adult socio-economic status

Chain of causation leading to improved socio-economic status:

birthyear
rainfall

infant girl
health

education
adult health

socio-economic
status

How to measure it and what are the outcomes?

Regress the asset index on birthyear rainfall for the female sample and
compare when including controls as adult health and education.
The results?
Without controls the effect of birthyear rainfall on asset index is 0.762.
Large effect by controling the education (0.566). Smaller effect by
including the health variables (0.660).
Suggesting that rainfall has LR positive effects through education
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Results and Conclusions

Robustness checks

1
2

OLS estimates show similar patterns

Selection bias:
1

Did the sample size reduce due to rainfall anomalies?

Downward bias
No supporting evidence

Birth planning in good season: parents who do this might have

different characteristics that affect socio-economic outcomes
Upward bias
No supporting evidence

Same analysis in urban areas:

Weak and sometimes negative effect of rainfall (water-related diseases)

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Results and Conclusions

Net Present Value

Magnitude of the Effects

Measure the net present value of the future cost of being born in a
dry season, in terms of lost earnings
Track earnings over 1979-2028 of women born in 1963
Then they estimate the effect of 20% lower rainfall in their birthyear
Duflo (2001) 1 year less of schooling decreases income by 8.7%
20% lower
rainfall

0.22 fewer year

decreases earnings

of schooling
by 1.9% (0.22*8.7%)

= the NPV of lost future wages due to lower rainfall in 1963 is

$77.3 million (0.4% of Indonesias GDP in 1963)

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Results and Conclusions

Conclusion

Why does rainfall have a positive effect on female adult outcomes?

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Results and Conclusions

Conclusion

Why does rainfall have a positive effect on female adult outcomes?

higher agricultural output
positive shock to household incomes
better health for infant girls
mediated by improved schooling attainment

Consumption smoothing: incomplete, did not completely shield

female infants from weather shocks on average
Policy implications: weather insurance (for example)

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Comments and Critics

Positive Points
Internal Validity and Contribution

Internal Validity:
Lots of robustness checks
Big sample size (greater statistical power)
High-quality data (IFLS)
Contribution:
Innovative: looks at LR impact of gender bias (as opposed to SR)
Pinpointing period in which exogenous shock matters
Helps justify public policies that help HH cope with typical
year-to-year variation of environmental conditions, as opposed to
those who only respond to extreme events
Studied/replicated in top Universities, and used as model in literature
on developing countries
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Comments and Critics

Comments
However,
External validity?
Some degree of generalizability (normal shocks in developing countries)
Difficult (depends on gender bias, etc)

Not specific on what type of agriculture production: different crops

need different amount of rainfall
Downward bias: misreporting of birth month
No sensitivity analysis for average annual rainfall variable
(1953-1999). Could alter results, possible overestimation
stationary ?

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Comments and Critics

References

[1] Sharon L. Maccini, Dean Yang. (June 2009). Under the Weather:
Health, Schooling, and Economic Consequences of Early-Life Rainfall,
The American Economic Review, vol. 99, no. 3, (pp. 1006-26).
[2] Duflo, Esther. (September 2001) . Schooling and Labor Market
Consequences of School Construction in Indonesia: Evidence from an
Unusual Policy Experiment. American Economic Review, vol. 91, no. 4,
(pp 795-813).

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Comments and Critics

Thank you for your attention!

Any questions?

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Comments and Critics

For the super curious

Curious on how they prepared the data and their robustness checks?
Check out the online appendix

Maccini & Yang (2009)

here

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Appendix

Appendix
Data Selection

Definition of urban area: a city of 50,000 or more inhabitants

(according to 1930 Indonesian census)
IFLS3 includes information on district of birth, month of birth, variety
of health variables, lung capacity readings
Starts with 1953 cohort because before the average distance to the
stations was too high due to problems deriving from the war
End with 1974 cohort because 25/26 is a representative age of
entrance into the work force
Median distance between birth district and rainfall station is 14 km
Total of 378 stations matched with IFLS birth districts
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Appendix

Measurement Error
If the true model is
Yijst = Rjt + ijst
where Rjt is the precise amount of rainfall measured at district j.
Because not all weather stations are adjacent to the districts, there will be
measurement error in rainfall measurements. Therefore, Rjt = Rjt + ujt
where ujt is the measurement error.
What is estimated is:
Yijst = Rjt + ijst = (Rjt + ujt ) + ijst = Rjt + (ujt + ijst )
It can be therefore shown that the estimated coefficient will be attenuated
towards 0:
var (Rjt )
<
=
var (Rjt ) + var (ujt )
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Appendix

Instrumental Variable

Our model is: Yijst = Rjt + ijst

Rjt is endogenous. We use our instrument Z (2nd-5th closest rainfall
station) and regress Rjt on it.
We get the predict variable Rjt =
0 + 1 Z1 + 2 Z2 + 3 Z3 + 4 Z4 + 5 Z5 + v where v is the composite
error.
We finally regress the second stage: Yijst = Rjt + ijst
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Appendix

Average rainfall in Indonesia

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