The hidden social costs of climate change: Evidence on weather shocks, children’s mobility and rural economic welfare in Uganda

Children’s mobility is a relevant phenomenon worldwide. It is even more relevant in developing countries, where the income conditions of rural households exacerbate it. Meanwhile, difficulties in feeding and raising children in rural areas are worsened by climate-related shocks, which severely affect agricultural production. The aim of this paper is to move a further step in the investigation of the role played by weather shocks in driving rural households’ critical decisions, with specific attention to children’s mobility. In turn, we aim to identify the impact of such decisions on rural households’ economic welfare in terms of expenditure and income. To this end, we apply a panel two-stage least squares model, and then we adopt the approach by Callaway and Sant’Anna (2021) to evaluate the dynamic effects of children’s mobility decisions on rural households’ economic outcomes. Our findings highlight the asymmetric effects of climate shocks: wet events are associated with increased child mobility, while droughts reduce the likelihood that children are sent away. Furthermore, we estimate causal links between child mobility and economic outcomes. Although child relocation is associated with modest increases in per capita food expenditure, total income, and agricultural income, dynamic analysis reveals a more complex picture. Positive effects on expenditure are only manifest two years after relocation, particularly for older children, while crop income declines significantly, although temporarily, following child mobility decisions. These results suggest that child relocation is not always an effective or welfare-improving strategy.