Shocks, Coping, and Outcomes for Pakistan's Poor: Health Risks Predominate

Abstract

Reporting the results of a novel survey of shocks, coping, outcomes, and safety nets in Pakistan, we find high incidence and cost of shocks borne by households, with health and other idiosyncratic shocks dominating in frequency, costliness, and adversity. Sample households lack effective coping options and use mostly self-insurance and informal credit. Many shocks result in food insecurity, informal debts, child and bonded labour, and recovery is slow. Private and public social safety nets exist but offer little effective protection. Public action is needed to better control public health hazards and provide non-exploitative credit and more effective safety nets.

Keywords: risk, vulnerability, social protection, safety nets

JEL Classification: O12