The Effects of Early-Life Exposure to Pollution on Children's Human Capital Formation: The Case of Indonesia

Maria Rosales Rueda, University of California, Irvine
Margaret Triyana, Nanyang Technological University

This paper analyzes the effects of an early-life shock in Indonesia on children’s human capital formation and parental responses to these shocks. We exploit the geographical variation of Indonesia’s forest fires during the El Nino phenomenon in 1997, as well as cohort variation in exposure. Children affected by these shocks in utero and in early years have worse health outcomes relative to children not exposed to these shocks. The persistence of the effects is affected by the severity of the initial shock and parental response. We find that the health effects persist, but other factors mitigate the initial effect on cognitive skills.