The Financial Crisis That Quietly Stunted a Generation

Economic downturns can have far-reaching consequences, extending beyond immediate financial hardship to impact the long-term health and development of children. A recent study from the University of Bonn reveals that the 1990s Asian financial crisis, which caused a surge in rice prices in Indonesia, left lasting marks on the physical growth and future health risks of children exposed during that period.

Rice Price Inflation and Child Growth

Researchers from the Center for Development Research (ZEF) at the University of Bonn analyzed data from the Indonesian Family Life Survey (IFLS) to investigate these effects.^{1, 2} The IFLS, a long-running study tracking households over many years, allowed researchers to examine regional differences in rice price inflation between 1997 and 2000 and correlate these patterns with body measurements recorded during childhood and early adulthood.^{1, 2}

“We see that a massive price shock not only has a short-term impact, but can too affect the long-term physical development of children,” says Elza S. Elmira, the study’s lead author.² The crisis-induced price rise increased chronic malnutrition and was associated with a 3.5 percentage point increase in child stunting.^{1, 3} Children severely affected were not only shorter than their peers later in life but also significantly more prone to obesity.^{1, 2}

Hidden Nutrient Deficiencies During Economic Crisis

The surprising link between childhood malnutrition and increased obesity risk prompted further investigation. Researchers theorize that during times of economic crisis, families tend to prioritize calorie intake over nutrient-rich foods.²

“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,” explains Elmira.²

The study followed the same individuals through 2014, when they were between 17 and 23 years ancient. Data revealed clear connections between early exposure to the price shock, body mass index (BMI), and the likelihood of obesity later in life for those who were three to five years old during the crisis.²

Protecting Children During Critical Development

“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.² “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.”²

Urban Families and Education Levels Matter

The study found that the effects of the crisis were most pronounced in urban areas.¹ Urban households are more reliant on purchasing food, whereas some rural families grow their own rice, providing a buffer against price spikes.¹

Education levels also played a significant role. Children whose mothers had lower levels of education were more affected than those whose mothers had higher education levels.¹

“The results suggest that crisis aid should not be based solely on poverty lines,” emphasize Elmira, and Qaim.¹ “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.”¹

Why the Findings Matter Today

Researchers note that shocks to harvests, incomes, and food prices are becoming increasingly common globally due to conflicts, pandemics, and extreme weather events.¹ The Indonesian case provides real-world evidence demonstrating how economic turmoil can translate into lasting health risks through rising food prices.¹

¹ The Financial Crisis That Quietly Stunted a Generation, University of Bonn, March 15, 2026.

² Expensive food makes children fat — University of Bonn, University of Bonn.

³ How the 1990s Asian Financial Crisis Impacted Child Development in Indonesia, wutshot.com, March 15, 2026.