The educational cost of a natural disaster: Evidence from the 2007 Pisco Earthquake

This paper studies the impact of the 2007 Pisco earthquake on human capital accumulation in Peru. Using microdata from the 2017 Population and Housing Census (Censo de Población y Vivienda) and geospatial measures of seismic intensity, we implement a cohort-by-district difference-in-differences strategy that exploits variation in birth year and geographic exposure to the shock. We find that the population most exposed to the earthquake accumulated, on average, fewer years of education (-0.67 years) compared to the population residing in districts far from the epicenter. Likewise, exposure to the 2007 earthquake significantly reduced the probability of completing primary education (-0.06 points) and secondary education (-0.07 points) among young cohorts in the affected areas. This suggests that the negative impact of the earthquake on human capital extends not only to temporary schooling interruptions but increased risks of dropping out. These findings remain consistent across various robustness checks and suggest that the primary transmission channel is the destruction of educational infrastructure. The study concludes that the earthquake's effects were not limited to immediate human losses and material damage, but instead generated long-term losses in human capital, highlighting the need to incorporate the educational dimension into risk management and post-disaster response strategies.