Delving into the effects of financial crises on human development

This paper examines the effects of different types of financial crises on overall human development and its components over a panel of 113 countries during the period 1990-2017. Relying on a System-GMM estimator, we find that all types of financial crises have both shortand long-run adverse effects on human development and its components. The adverse effects of banking crises on human development are less severe than those of currency, debt, and twin/triple crises. Delving into the components of human development, education is, in general, less affected by financial crises than health and income. We also find that banking crises have a more significant impact in developed countries, while debt and currency crises are more harmful in developing ones, where education is particularly affected by debt crises. Nevertheless, both groups of countries face some level of deterioration of human development in the aftermath of financial crises.