How a 1990s Financial Crisis Stunted a Generation of Children

Rising food prices during economic crises may shape children’s health long after the turmoil ends.

When an economic crisis drives food prices upward, the impact is rarely shared equally. City residents and people with lower levels of education are often hit first, and the consequences can extend far beyond temporary hardship.

New research from the University of Bonn shows that such price shocks can shape children’s physical development in ways that last a lifetime. By revisiting the Asian financial crisis of the 1990s, the researchers found that sharp increases in the price of rice, Indonesia’s most important staple food, left lasting marks on children’s growth. The study appears in the journal Global Food Security.

The team from the Center for Development Research (ZEF) at the University of Bonn drew on long-term data from the Indonesian Family Life Survey (IFLS), which has tracked households over many years. They compared regional differences in rice price inflation between 1997 and 2000 and linked these changes to body measurements taken in childhood and again years later, when participants had reached young adulthood.

The research team from the Center for Development Research (ZEF) at the University of Bonn analyzed data from the Indonesian Family Life Survey (IFLS), which has followed households over an extended period. They compared regional differences in rice price inflation between 1997 and 2000 and connected these trends to body measurements taken during childhood and later in early adulthood.

“We see that a massive price shock not only has a short-term impact, but can also affect the long-term physical development of children,” says Elza S. Elmira, the study’s lead author. “The crisis-induced price rise increased chronic malnutrition and was associated with a 3.5 percentage point increase in child stunting. Children severely affected will not only remain shorter than their unaffected peers later in life, they will also be significantly more prone to obesity.”

This unexpected combination of stunted growth and higher obesity risk caught the researchers’ attention. Elmira suggests a possible reason: “In times of crisis, families save less on calories than on more expensive, nutrient-rich foods. This results in a ‘hidden deficiency’ of important micronutrients, which slows down height growth without necessarily reducing body weight to the same extent.”

By following the same children through 2014, when they were between 17 and 23 years old, the researchers could see how early hardship translated into later health outcomes. Those who were three to five years old during the crisis showed clear links to higher body mass index (BMI) and an increased likelihood of obesity, highlighting how short-term economic shocks can quietly influence health decades later.

Protecting children in sensitive developmental stages

“Deprivation in early childhood can have lifelong effects – growth disorders are easier to measure but are often accompanied by mental development impairments and an increased risk of obesity and chronic diseases,” says Prof. Dr. Matin Qaim, co-author of the study.

“In the same crisis, undernutrition and obesity can both increase. This underscores the importance of nutrition-sensitive crisis policy: it must specifically protect children in sensitive development stages. If food policy is only concerned about calories, it can miss the real problem.”

The agricultural economist is a member of the Transdisciplinary Research Area “Sustainable Futures” at the University of Bonn and the Cluster of Excellence “PhenoRob – Robotics and Phenotyping for Sustainable Crop Production.”

Stronger effect in cities and among people with lower levels of education

The effects are particularly pronounced in urban areas, where households are more dependent on purchasing food, while families in rural areas sometimes produce their own rice. Educational background also plays a role: children of mothers with low levels of education are significantly more affected than children of better-educated mothers.

“The results suggest that crisis aid should not be based solely on poverty lines,” emphasize Elmira and Qaim.

“Especially in cities and in places with low knowledge about balanced diets, a price shock can worsen the quality of nutrition such that the consequences are long-term and irreversible.”

Why this is relevant today

The Bonn researchers point out that harvest, income, and price shocks are increasing worldwide — due to conflicts, pandemics, and extreme weather events. The analysis from Indonesia thus provides empirical evidence on how economic turmoil can translate into long-term health risks via food prices.

The results in this study are interpreted as statistical correlations; over long periods of time, not all potentially confounding influences can be ruled out with certainty.

Reference: “Macroeconomic shocks and long-term nutritional outcomes: Insights from the Asian financial crisis” by Elza S. Elmira and Matin Qaim, 30 December 2025, Global Food Security.
DOI: 10.1016/j.gfs.2025.100900

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