The Human Capital Legacy of a Trade Embargo

Research Seminars
Academic Areas Economics and Public Policy
Prof. Abhishek Chakravarthy, Assistant Professor of Economics, University of Essex
April 21, 2017 | 3:00 PM - 4:30 PM | Friday
AC 2 MLT, Level – 2, Hyderabad, India
Contact: Neha Gupta,,
For ISB Community
Abstract: We estimate the effects of in-utero exposure to a trade embargo on survival and human capital in an import-dependent developing country. Using a sharp regression discontinuity design, we show that a nearly comprehensive embargo imposed by India on Nepal in 1989 led to a close to 30 percent decrease in reported live births the month after it began. Adult survivors of exposure also have more education and earn an additional 20 U.S. dollars per month compared to unexposed cohorts.The regional variation in post-embargo income is consistent with a model that combines internal and external trade costs with non-homothetic preferences.