The role of microcredit in older children's nutrition: Quasi-experimental evidence from rural China

This article evaluates the causal impact of rural households' borrowing, through formal microcredit, on child nutrition in poor northwest China. The analysis exploits the panel data in rural Gansu between 2000 and 2004. Unobserved differences between borrowers and non-borrowers are controlled for in a dynamic fuzzy regression-discontinuity design creating a quasi-experimental environment for causal inference. Both anthropometric and micronutrient measures of child nutrition are investigated. Borrowing formal microcredit improves parent-reported health status and weight, and alleviates anemia and zinc deficiency. All effects nevertheless appear to exist in the short-term only.