Effects of the Global Financial Crisis on Children's School and Employment Outcomes in El Salvador

Central America has been one of the regions hardest hit by the global financial crisis. This article analyses the short-run effects of the crisis on children's schooling and employment outcomes in El Salvador, exploiting repeated cross-sectional samples of the annual household survey for the period 2000-8. It reveals that this early phase of the financial crisis has decreased school attendance for girls and boys aged 10-16 and increased child employment for boys of the same age range, and also shifted attendance towards public schools. A falsification test demonstrates that a placebo, or 'false crisis' defined as second semester 2007, does not have the same adverse impacts on children's outcomes as the manifested crisis.