Natural Hazards and Religion-Based Disparities in Human Capital: Lessons from Forest Fires

Forest fires contribute significantly to air pollution with direct implications for health deterioration and human capital development. This article takes advantage of satellite data on fire intensity over time to quantify disparities in educational attainment between major and minor religion groups induced by the incidence of forest fires in Nepal. Regression estimates show that forest fires reduce the likelihood of completing elementary school and middle school among non-Hindus, while the corresponding effect on Hindus is not statistically distinguishable from zero. To understand why non-Hindus lose human capital from the incidence of fires, the study delves into several economic channels such as changes in educational expenditures. Findings show that fire severity causes non-Hindus to experience a significant reduction in expenditures for school supplies and an increase in worry about scholarship needs. Together, these results illustrate that natural disasters exacerbate educational outcomes through economic channels among individuals practicing minority religion in a predominantly Hindu society.