The Costs of Consumption Smoothing: Less Schooling and Less Nutrition

  • Authors: Raül Santaeulàlia-Llopis.
  • BSE Working Paper: 110413 | November 16
  • Keywords: consumption , expenditure , Sub-Saharan Africa , Lifecycle , Self-farming , Nutritional Loss
  • JEL codes: E21, O11, R20
  • consumption
  • expenditure
  • Sub-Saharan Africa
  • Lifecycle
  • Self-farming
  • Nutritional Loss
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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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