When environmental disasters hit, the damage to physical capital—so-called brick and mortar assets—is usually quite apparent. Downed power lines; bridges washed away by floods; the charred remains of homes and cars in the wake of wildfires. We see such footage in the news all the time.
Less obvious is the harm done to human capital, which, broadly speaking, can be thought of as the capacity of human agents to engage in productive economic activity. In an increasingly knowledge-based economy, the skills and capacities learned in school comprise an asset base every bit as essential as the bricks in a building or the steel rods in a factory.
Could it be possible for largely invisible disruptions to human capital formation to have economic implications that are deeper and more impactful than first meets the eye? This is important because educational attainment and the skills that schooling and training confer have become an increasingly valuable input to success in the modern economy. This is true both in terms of aggregate economic performance—the relative wealth and poverty of nations—as well as for individual economic mobility, that is, for the chances of moving up the economic ladder within a given society.
