Background: There is little empirical evidence on the effect of childhood malnutrition on children’s cognitive achievements in low income countries like Ethiopia. A longitudinal data is thus vital to understand the factors that influence cognitive development of children over time, particularly how early childhood stunting affects cognitive achievement of children up to the age of 8 years.

Objective: To examine the effect of early childhood stunting on cognitive achievements of children using longitudinal data that incorporate anthropometric measurements and results of cognitive achievement tests such as Peabody Picture Vocabulary Test and Cognitive Development Assessment quantitative tests.

Method: Defining stunted children as those having a standardized height for age z-score less than -2; we used a Propensity Score Matching (PSM) to examine the effect of early childhood stunting on measures of cognitive performance of children. The balance of the propensity score matching techniques was checked and found to be satisfied (P<0.01)

Results: Early childhood stunting is significantly negatively associated with cognitive performance of children. Controlled for confounding variables such as length of breastfeeding, relative size of the child at birth, health problems of early childhood such as acute respiratory illness and malaria, baseline household wealth, child gender, household size and parental education, estimates from PSM show that stunted children scored 16.1% less in the Peabody Picture Vocabulary Test and 48.8% less in the Quantitative Assessment test at the age of eight, both statistically significant at P<0.01.

Conclusions: It is important to realize the importance of early investment in terms of child health and nutrition until five years for the cognitive performance of children. As household wealth and parental education are particularly found to play an important role in children’s nutritional achievements, policy measures that are directed in improving household’s livelihood may have a spill-over impact in improving child nutritional status, and consequently cognitive development and schooling. [ Ethiop. J. Health Dev. 2017;31(2):75-84]