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The Costs of Consumption Smoothing: Less Schooling and Less Nutrition

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  • Leandro Magalhaes
  • Dongya Koh
  • Raül Santaeulàlia-Llopis
Abstract
Using novel micro data, we explore lifecycle consumption in Sub-Saharan Africa (SSA). We find that households’ ability to smooth consumption over the lifecycle is large, par- ticularly, in rural areas. Interestingly, consumption in old age is sustained by shifting to self-farmed staple food, as opposed to traditional savings mechanisms or food gifts. This smoothing strategy entails two important costs. First, there is a loss of human capital as children are diverted away from school and into producing self-farmed food. Second, a diet largely concentrated in staple food (e.g., maize in Malawi) in old age results in a loss of nutritional quality for households headed by the elderly.

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  • Leandro Magalhaes & Dongya Koh & Raül Santaeulàlia-Llopis, 2016. "The Costs of Consumption Smoothing: Less Schooling and Less Nutrition," Working Papers 939, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:939
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    2. Simplice A. Asongu & Nicholas M. Odhiambo, 2021. "Information Asymmetry and Insurance in Africa," Journal of African Business, Taylor & Francis Journals, vol. 22(3), pages 394-410, July.
    3. Simplice A. Asongu & Nicholas M. Odhiambo, 2020. "Insurance and Inequality in Sub-Saharan Africa: Policy Thresholds," Working Papers of the African Governance and Development Institute. 20/005, African Governance and Development Institute..

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    More about this item

    Keywords

    consumption; expenditure; Sub-Saharan Africa; Lifecycle; Self-farming; Nutritional Loss;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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