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Household Responses to Adverse Income Shocks in Latin America

Author

Listed:
  • Gaviria, Alejandro
Abstract
This paper uses a new data set to study household responses to adverse income shocks in seven Latin American countries. The results show (i) that households respond to income shocks mainly by increasing their labor force participation, selling assets, and cutting back on human capital investments, (ii) that poor households are the most likely to be affected by adverse income shocks, and (iii) that lower-middle-class households are more likely to cut back on human capital investments and move abroad when faced with an adverse income shock. Taken together, these results offer ample justification for publicly funded safety nets that target the poor.

Suggested Citation

  • Gaviria, Alejandro, 2001. "Household Responses to Adverse Income Shocks in Latin America," IDB Publications (Working Papers) 1417, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:1417
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    References listed on IDEAS

    as
    1. Nora Lustig, 2000. "Crises and the Poor: Socially Responsible Macroeconomics," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2000), pages 1-30, August.
    2. Alejandro Gaviria Uribe, 2000. "¿Sobre quién ha recaído el peso de la crisis?," Coyuntura Social 12962, Fedesarrollo.
    3. Gaviria, Alejandro & Pagés, Carmen, 1999. "Patterns of Crime Victimization in Latin America," IDB Publications (Working Papers) 1102, Inter-American Development Bank.
    4. Gaviria, Alejandro & Pages, Carmen, 2002. "Patterns of crime victimization in Latin American cities," Journal of Development Economics, Elsevier, vol. 67(1), pages 181-203, February.
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    Cited by:

    1. Chrysanthi Balomenou & Aniko Kalman & Konstantinos Kolovos, 2014. "Comparative analysis of the implementation of Triple Helix Theory in Greece and Hungary and lessons learned from both cases´," ERSA conference papers ersa14p954, European Regional Science Association.
    2. Pierre‐Richard Agénor, 2004. "Macroeconomic Adjustment and the Poor: Analytical Issues and Cross‐Country Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 18(3), pages 351-408, July.
    3. FIEL, Konrad Adenauer Stiftung & FIEL (ed.), 2006. "Planeando el futuro. Las familias Argentinas y sus decisiones de consumo, ahorro e inversión en capital humano," Books at FIEL, FIEL, edition 1, volume 1, number 0306.
    4. Echeverría, Lucía & Menon, Martina & Perali, Federico & Berges, Miriam, 2019. "Intra-household inequality and child welfare in Argentina," Nülan. Deposited Documents 3051, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    5. Echavarría-Soto, Juan José & López, Enrique & Ocampo, Sergio & Rodríguez-Niño, Norberto, 2012. "Choques, instituciones laborales y desempleo en Colombia," Chapters, in: Arango-Thomas, Luis Eduardo & Hamann-Salcedo, Franz Alonso (ed.), El mercado de trabajo en Colombia : hechos, tendencias e instituciones, chapter 18, pages 753-794, Banco de la Republica de Colombia.
    6. Escobal, Javier & Saavedra, Jaime & Suárez, Pablo, 2005. "Economic Shocks and Changes in School Attendance Levels and Education Expenditure in Peru," MPRA Paper 56481, University Library of Munich, Germany.
    7. Jorge A. Paz, 2008. "Cambios en el ingreso del hogar y sus efectos sobre la escolaridad de menores (Argentina, 1995-2003)," Working Papers 2, Instituto de Estudios Laborales y del Desarrollo Económico (IELDE) - Universidad Nacional de Salta - Facultad de Ciencias Económicas, Jurídicas y Sociales.
    8. Jairo Nunez & Silvia Espinosa, 2005. "Pro-Poor Growth And Pro-Poor Programs In Colombia," Documentos CEDE 3379, Universidad de los Andes, Facultad de Economía, CEDE.
    9. Salas Bahamón, Luz Magdalena & Sánchez Torres, Fabio, 2004. "How do the Colombian Families Respond to the Changes in the Economic Conditions?," IDB Publications (Working Papers) 4397, Inter-American Development Bank.
    10. Sojo, Ana, 2003. "Social vulnerability, insurance and risk diversification in Latin America and the Caribbean," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    11. Chrysanthi Balomenou & Konstantinos kolovos, 2013. "Universities' funding in the the current global financial crisis: Threat or opportunity for the implementation of Triple Helix Theory?," ERSA conference papers ersa13p839, European Regional Science Association.
    12. Jon Jonakin, 2009. "Labour and Its Discontents: The Consequences of Orthodox Reform in Venezuela and Mexico," Journal of Development Studies, Taylor & Francis Journals, vol. 45(8), pages 1284-1306.
    13. World Bank, 2004. "Uruguay : Poverty Update 2003," World Bank Publications - Reports 15682, The World Bank Group.

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    More about this item

    Keywords

    WP-455;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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