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Richer but More Unequal? Nutrition and Caste Gaps
This paper explores children's cognitive outcomes using novel panel data from India for children 6 months through 8 years. For the first time in a developing country, this allow us to estimate a value-added model of cognitive development at a very young age. We look at the nutrition-cognition link and at the relationship between caste and test scores. We use an instrumental variable approach and find that a 1 standard deviation increase in height-for-age at the age of 5 leads to cognitive test scores that are about a 16 per cent of a SD higher at age 8. Our analysis suggests that the differences in income levels between castes found in adulthood arise early in childhood. After controlling for a wide range of controls; upper caste children show a substantial advantage in vocabulary tests, but most importantly, they show a more pronounced gender inequality than their lower caste counterparts. Compensating low caste children with the average nutritional status of their upper caste counterparts would close around one fifth of the caste cognitive differentials. We also show that UC families discriminate more against girls. Using a sub-sample of the data with the siblings' birth weight in a unique way, we find that family fixed effects explain 1SD of the overall nutrition-cognition effect.