Household Responses to Adverse Income Shocks in Latin America

27 Pages Posted: 21 Apr 2011

See all articles by Alejandro Gaviria

Alejandro Gaviria

Universidad de los Andes, Colombia - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 2001

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, Household Responses to Adverse Income Shocks in Latin America (July 2001). IDB Working Paper No. 382, Available at SSRN: https://ssrn.com/abstract=1817253 or http://dx.doi.org/10.2139/ssrn.1817253

Alejandro Gaviria (Contact Author)

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
50
Abstract Views
588
PlumX Metrics