Three essays exploring the impact of natural disasters on education and poverty in El Salvador and Indonesia

Abstract

The first essay investigates the relationship between natural disasters and poverty at the district level in Indonesia. System generalized method of moments (GMM) and regional fixed effects models are employed, and the results suggest that damage to manufacturing facilities, hospitals, education centers, and religious buildings are important sources of increased poverty. The results also suggest that disasters associated with real losses can reduce inequality among the poor by primarily harming the relatively less poor. Disasters are also associated with a lower poverty line in the case of real losses, suggesting the estimates obtained using that measure are biased downward. In the second essay, data on enrollment rates in primary and lower secondary school are used to explore the ways natural disasters influence enrollment in education in Indonesia. The estimated coefficients are obtained using regional fixed effects regressions and suggest that disasters are generally (but not always) associated with lower enrollment. Damage to the employment sector is more important for primary school enrollment, while damage to agriculture and educational institutions is more important for lower secondary school enrollment. Damage to crops is associated with higher enrollment in lower secondary school. Additional regressions indicate that higher poverty exacerbates the negative impact of disasters on enrollment. In the third essay, household survey data is used to examine the impact of earthquakes on investment in education in El Salvador. Investment in education is measured using enrollment in and expenditures on education. Applying a difference-indifferences approach, it is estimated that being directly affected by the earthquakes leads to larger expenditures on education but that being located in a treated region is not associated with expenditures. A direct impact of the earthquakes is not associated with enrollment, but being located in a treated region leads to lower enrollment in the year of the earthquake. The negative impact of the earthquakes on enrollment dissipates quickly as there is no association between treatment and enrollment in the year following the earthquake.