Early-life exposure to weather shocks and human capital accumulation: evidence from the Peruvian Highlands

This working paper uses Young Lives data to investigate the impact of early-life exposure to unusually low temperatures (below long-term averages) on the formation of human capabilities in a cohort of children born in the Peruvian Andes. The empirical strategy uses differences in exposure to temperature levels across children within clusters, generated by differences in date of birth, at the month precision, in areas where frosts are widespread. The results are consistent with the notion that early-life adversity can have implications on child development; however, the impacts found differ by age period and gender. A one standard deviation increase in the number of unusually cold months the child is exposed to during the first three years of life reduces height-for-age at the age of 5 by 2.7 per cent, but the impact fades away by the age of 8. On average, no impact is found on cognitive achievement and socio-emotional competencies. However, exposure is negatively associated with cognitive achievement for girls, with a standardised coefficient of -1.5 per cent. Overall, the results suggest that exposure to unusual weather variations can have implications for child development, but recovery is possible in some dimensions and the impact can vary by gender