Effects of the 2010 Droughts and Floods on Community Welfare in Rural Thailand: Differential Effects of Village Educational Attainment

Climatic events can have disastrous consequences on rural livelihoods where economic activities mainly rely on agriculture and natural resources. The impacts of the natural disasters however are not distributed evenly. They vary considerably with demographic and socio-economic characteristics of a given area. Based on the Thai government surveys of living conditions and life quality for the years 2009 and 2011 of 68,695 villages, this paper aims to assess the impacts of natural disasters on community welfare and investigate the role of education as a buffer to livelihood and climate shocks. This study use five items as an indicator of welfare, namely, food expenditure, non-food expenditure, productive expenditure on agriculture, expenditure on education and income. Although we find that rural communities are able to smooth consumption such that droughts and floods do not produce a negative effect on food and non-food expenditure nor spending on agriculture and education, there is significant variation in consumption smoothing by community’s educational attainment level. Communities with higher proportion of members with at least secondary education enjoy the increase in income and consequently consumption. This finding shed light on positive externalities of education in overcoming hardship during weather shocks.