Macroeconomic shocks and long-term nutritional outcomes: Insights from the Asian financial crisis

Abstract

Climate change, conflicts, pandemics, and other disruptive events can lead to shocks in people's incomes, prices, and access to food, with profound implications for nutrition and health. The short- and long-term effects of different types of shocks are not yet sufficiently understood. Here, we use data from Indonesia to analyze effects of the Asian financial crisis, which happened in the late-1990s, on nutritional outcomes. The crisis contributed to large temporary increases in rice prices with regional variation, which we exploit to estimate effects on child height-for-age z-scores (HAZ) and other anthropometric indicators. Panel data regression models with individual fixed effects suggest that the rice price inflation led to an average decrease in HAZ of 0.135 and an increase in child stunting by 3.5 percentage points, after controlling for confounding factors. These effects were more pronounced in urban than rural areas. Children with mothers that only have little education suffered over-proportionally. Beyond the immediate impacts, we examine long-term effects and find that individuals severely hit by the crisis during childhood remain shorter also during adulthood and are more likely to be obese. Our findings highlight the need for nutrition-sensitive interventions in national and global crisis response policies.