Childhood Post Traumatic Stress Disorder and Later-Life Outcomes: A Hidden Consequence of the 1989 Typhoon Gay

In human capital literature, it is established that skills are cross-productive and that the production technology is dynamic. This study looks at a case of Thailand and shows that a damage of mental health capital early on in life has a significant adverse effect on schooling attainment. We take the event of Typhoon Gay in 1989 in Thailand's South-Eastern region as a random trigger of Post-Traumatic Stress Disorder prevalence amongst young children in the disaster area. Using both micro datasets and a unique survey, we find strong evidence that disaster affected children suffered from a long-term undetected reduction in their mental health capital and thus worse accumulation of skills in other dimensions.