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발표자: Hyuk Son (Utrecht University)

주제: Long-run Effects of Catastrophic Drought Insurance

장소: 대우관 본관 4층 415호 (관정환 홀)

날짜: 05월 14일 화요일  오후 2시 00분  ~ 오후 3시 30분

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교수님들의 많은 참석을 부탁드리며 대학원생들이 참여할 수 있도록 적극 권유해 주시면 감사하겠습니다.

강의 요약

Aggregate shocks such as droughts, floods, and other natural disasters can have negative long-run impacts on various well-being indicators. Formal insurance against covariate shocks offers a tool to mitigate these negative consequences. We study the long-run impacts of catastrophic drought insurance -- first introduced in 2010 -- on pastoralists in Kenya and Ethiopia. We leverage randomized insurance premium discounts distributed when insurance was first introduced to estimate the impact of insurance on outcomes measured 10 years later. Insurance changed production strategies, inducing a substantial increase in the herd share of larger animals, such as camels and cattle, versus smaller animals like goats. Furthermore, we observe a substantial increase in the share of household members who completed age-appropriate education, seemingly resulting from both the reduced marginal productivity of labor of children in herding large animals and positive income effects. Reduced ex ante risk exposure and the behavioral change it induces -- not the cash transfers resulting from the indemnity payment -- generate the long-run effects we observe. The results are robust to controlling for prospective spillover effects among households.