Impacts of Natural Disaster on Changes in Parental and Children's Time Allocation: Evidence from the Great East Japan Earthquake

While recent studies have documented that parents' and children's own time investment are crucial factors of cognitive and non-cognitive development, the causes of changes in their (endogenous) choices are understudied. Exploiting the regional variation of the Great East Japan Earthquake (the Earthquake) and applying difference-in-differences, we present new and robust evidence that a disastrous shock can lead to a positive time investment in children's development by both parents and children. On the other hand, parental monetary investment was negatively affected by the Earthquake. This observation suggests the existence of replacements between pecuniary and nonpecuniary parental investment. Interestingly, the positive effects in children's own studying time are more intensive among children of lesseducated mothers and children not enrolled in cram schools: the population which might not have a rich studying environment.