Extreme weather and poverty risk evidence from multiple shocks in Mozambique

This paper investigates the effects of multiple weather shocks
on household welfare in Mozambique, as well as some of
the coping responses and price mechanisms at play. The
analysis employs a triple-difference strategy that exploits
variation in the shocks across space, time, and cropping
cycles. The findings demonstrate high levels of vulnerability
across various weather risks. Experiencing a cyclone, flood,
or drought leads to a drop of up to 25–30 percent in per
capita food consumption and around 0.4 fewer meals per
day per person. Poverty increased by 12 and 17.5 percentage
points in two of the three events analyzed. Human
capital accumulation, as measured by school participation
and morbidity, is disrupted. Households follow risk-coping
strategies, such as increasing the labor supply of their children
or selling assets, which entail partial protection in the
aftermath of the shock at the cost of lower income growth
in the future. In disentangling the channels, the paper
shows that maize prices exhibit higher volatility in food
markets that are spatially close to the most affected areas.
The results are robust to several robustness checks, including
analysis of bias from selective migration, and indicate that
household welfare and economic mobility in low-income
environments are constrained by uninsured weather risks.