Ethiopian Economics Association (EEA) and the Econometric Society 19th Annual Conference of the African Region Chapter of the Econometric Societ 12th international Conference on the Ethiopian Economy. July 16-19, 2014

1. ETHIOPIAN DEVELOPMENT
RESEARCH INSTITUTE
Does Early Life Shock Retard Cognitive Development?
Panel Data Evidence from Rural Ethiopia
Guush Berhane-IFPRI ESSP,
Mehari Hiluf-IFPRI ESSP, and
Tassew Woldehanna-Young Lives Ethiopia
Ethiopian Economics Association (EEA)
19th Annual Conference of the African Region Chapter of the Econometric Society
And
12th International Conference on the Ethiopian Economy
July 16-19, 2014, Addis Ababa
1

2. 2
Presentation Outline
1. Introduction
Motivation, Research question and objective
2. Data and measurement variables
3. Methodology
4. Results
Descriptive and Estimation results
5. Concluding remarks

3. 1. Introduction
 Motivation
 Cognitive development is a human skill development that
covers perception, thinking, learning, and capacity to
assess and solve problems.
 A large body of literature in Early Childhood development
(ECD) show that cognitive skills are formed relatively
early in life and linked to schooling and labor market
performance later in life.
Therefore, Proper development in critical period is highly
important for cognitive skill and future life chances of children!!!

4. Motivation
 Rural life in Ethiopia characterized by
 poverty, food insecurity and vulnerability to adverse
shocks.
• very poor investments on physical and cognitive
development (e.g., nutrition, health, parenting, home
learning environment).
• Occurrence of recurrent shocks exacerbate poor
conditions of child development.

5. Motivation
 In the face of this, the country has started implementing a
safety net program, called Productive Safety Net Program
(PSNP) since 2005.
 The PSNP provides transfers to food insecure households
in the form of food/cash-for-work and direct transfers.
 The PSNP thus aims at protecting households from ex-post
consequences of shocks as well as help building their
assets.

6. Motivation
 Vast literature document the long-term impacts of poverty,
malnutrition and shocks on early childhood development.
• Children exposed to drought shocks during early childhood
reveal a slow height growth (Martorell, 1999, Hoddinott
and Kinsey, 2001, Yamano et al., 2005 and Woldehanna,
2009).
• School‐aged children who were severely malnourished in
the early years are more likely to suffer from cognitive
deficit(Grantham-McGregor,1995;and Grantham McGregor
and Baker-Henningham , 2005)

7. Motivation
• Outes et al (2011) show significant positive impact of
nutrition on cognitive achievement of Peruvian children.
 However, there is limited evidence on effect of shocks on
cognitive development, particularly from developing
countries (Alderman, 2011).
 Further, food or cash support to the shock affected
households can reduce the negative impact of shock.

8. Motivation
 Most studies of PSNP have been focusing on its impact
on household income and food security (Berhane et al
2011; Jones et al 2010; Gilligan et al 2010; Hoddinnot et
al. 2009) and few on children’s education (Emirie et al
2008; Woldehanna 2009 and 2011; Tafere and Woldehanna
2012).
 This study hopes to contribute towards the recent
effort to bridging the evidence gap on effect of shocks
and safety nets on cognitive development.

9. Research question and objective
This study investigates the following three questions:
i) Is there a significant difference in cognitive achievement
between children who were affected by shock during the
critical period(early life) and those who were not affected
ii) Does experience of a shock at critical period reduce growth
of cognitive achievement over time (retard cognitive skill
development) ?
iii) To what extent interventions like PSNP affect cognitive
development of children?

10. Research question and objective
 Therefore, the main objective of this study is to asses
the effect of early life shocks and PSNP on cognitive
development of children.

11. 2. Data and measurement variables
 We use three rounds (2002, 2006, & 2009) panel data from
the Young Lives Longitudinal Study (YLLS) in Ethiopia.
 YLLS is tracking two cohorts of children, 2000 Younger
Cohort (children born in 2001/2) and 1000 Older Cohort
(children born in 1994/5).
 The sample comprises data from 20 sentinel sites that
cover five regions: the four regions plus Addis Ababa.
 Sampling was purposive in selecting sites but random in
selecting the households in each region.

12. Data and measurement variables
 We use the rural sentinel sites where shocks like crop failure
and livestock losses are relevant and PSNP operates.
 We also focus on the younger cohort because they were aged 6 to 18
months in round 1 (2002) and that makes investigation of the critical
developmental period possible.
 We proxy cognitive achievement of the children by Peabody
Picture Vocabulary Test (PPVT), which administered in round
2 and 3.
 Children are shown some pictures and asked to reflect on them. The number
and the level of difficulty of questions differ according to child’s age.

13. Data and measurement variables
 we use self-reported household shocks including crop
failure, livestock loss, death of family member, and divorce
as proxy for household shocks.
 The household participation in either public work (PW) or
direct support (DS) is also used as indicator of the
households PSNP participation.

14. Methodology
 Our study use both a simple descriptive analysis and panel data
models:
 With the two-period (round 2 and 3) PPVT score data of the
children, we estimate First-differencing (FD) method with
initial conditions.
ퟎퟗ−ퟎퟔ = 휶ퟎ + 휶ퟏ Δ 푯푨풁풊
Δ 푷푷푽푻풊
ퟎퟗ−ퟎퟔ + 휷ퟏ Δ 푺풉풐풄풌풔풊
ퟎퟗ−ퟎퟔ
ퟎퟗ−ퟎퟔ + 휹ퟏ Δ 푿풊
+흎 Δ 푷푺푵푷풊
ퟎퟗ−ퟎퟔ + 휶ퟐ 푯푨풁풊
ퟎퟐ
ퟎퟐ + 휹ퟐ 푿풊
+휷ퟐ 푺풉풐풄풌풔풊
ퟎퟐ + Δ 휺풊
ퟎퟗ−ퟎퟔ
…(1)
 As far as they are exogenous, adding the early life (Round 1)
status to the first difference still give consistent result (Shahidur ,
2010)

15. 4- Results
Descriptive Results:
Cognitive Score in 2006 and 2009 for the early Life (2002) Shock-affected
and Not-affected Children
Shocks in
2002
Mean Raw PPVT Score in 2006 Mean Raw PPVT Score in 2009
Not
affected
Affected Diff Not-affected Affected Diff
Crop
failure
20.71 18.02 2.69*** 79.11 63.9 15.23***
Livestock
loss
19.67 18.83 .84* 75.06 62.44 12.62***
Death of
family
member
19.51 18.96 0.56 72.814 62.76 10.05***
Divorce 19.49 19.1 0.39 72.03 73.71 -1.677

16. Change in PPVT Score (Δ2006-2009) for Early Life (2002) Shock Affected and
Not-affected Children
Shocks in 2002
Change in Raw PPVT Score
(ΔPPVT2006-2009 )
Not affected Affected Diff
Crop failure 58.91 46.29 12.63***
Livestock loss 55.87 44.18 11.69***
Death of family
member
53.81 44.29 9.51***
Divorce 53.023 55.5 -2.48

17. Figure 1: Comparison of Change in Age-standardized Raw PPVT Score
(Δ PPVT2006-2009) by Incidence of Shocks in 2002
40.00
20.00
0.00
-20.00
1 2 3 4 5 6 7 8 9 10
Age Decile in Month, 2002
Crop Failure Shock Not Affected in 2002
Crop Failure Shock Affected in 2002
30.00
20.00
10.00
0.00
-10.00
-20.00
1 2 3 4 5 6 7 8 9 10
Age Decile in Month, 2002
Livestock Loss Shock Not Affected in 2002
Livestock Loss Shock Affected in 2002
20.00
0.00
-20.00
1 2 3 4 5 6 7 8 9 10
Age Decile in Month, 2002
Death of Family Member Shock Not
Affected in 2002
Death of Family Member Shock Affected
in 2002
60.00
40.00
20.00
0.00
-20.00
-40.00
1 2 3 4 5 6 7 8 9 10
Age Decile in Month, 2002
Divorce Shock Not Affected in 2002
Divorce Shock Affected in 2002

18. Descriptive Result
 The overall descriptive results show that:
• There is a significant cognitive achievement and
development difference between children by the incidence of
crop failure, livestock loss, and death of family members
shocks in early age.
• Children affected by these shocks find to have a lower
cognitive score as well as lower cognitive development
over time.

19. Estimation Results (only variables of interest presented)
Dependent Variable: Δ PPVT Raw Score, 2006-2009
Variables
First-difference with initial
conditions
Initial condition variables (2002)
Shock dummies in 2002
Crop failure -5.376 (1.852)***
Livestock loss -4.810 (2.019)**
Death of family member -6.216 (3.378)*
Divorce 2.701 (4.963)
Δ PSNP participation 3.525 (1.608)**

20. Concluding remarks
 Our results show that early life (critical period) shocks,
particularly crop failure, loss of livestock, and death of
family members, have significant negative effect on
cognitive development.
• Comparing to the children who were not affected by early
life shocks, on average, children affected by crop failure,
loss of livestock, and death of family members scored 5.4,
4.8, and 6.2 points lower cognitive development,
respectively.
 Early life shock retards cognitive development of children!!!

21.  We also find that PSNP participation has a significant
positive impact on cognitive development of the children.
• On average, PSNP beneficiary children score 3.5 higher
points over non-beneficiary children.
 our results have immense implications:
 Investing in early childhood development to protect children
from shock can improve cognitive development of children,
which is also a detrimental factor for human capital
development as well as economic development of a country.

22.  The finding that PSNP has spillover effect on children’s
cognitive development suggests that more strong impact
would be realized if PSNP was child sensitive that target
children directly.
 We also note that PSNP has a potential to facilitate cognitive
development catch-up for children who were affected by
shock during the critical period.

23. Thank you!