Advanced Search
MyIDEAS: Login to save this paper or follow this series

Permanent Effects of Economic Crises on Household Welfare: Evidence and Projections from Argentina’s Downturns

Contents:

Author Info

  • Cruces, Guillermo
  • Gluzmann, Pablo
  • Lopez-Calva, Luis Felipe

Abstract

The quantification of the impact of crises on household welfare and socioeconomic outcomes is a fundamental input for the design of ex ante safety nets and ex post alleviation programs. Economic downturns have direct effects through employment and household income, but whether these and other impacts are permanent rather than transitory is harder to establish. This study of Argentina estimates the relationship between GDP growth and severe crises on poverty, youth unemployment, and a series of human capital related outcomes, such as infant and maternal health, and school enrollment and progression. The identification strategy relies on provincial variation in GDP, and on a difference in differences estimation from the severe 1999-2002 crisis. The objective is twofold. On the one hand, the study documents the effects of past episodes. On the other hand, it extrapolates past results to provide bounds for the impact of the 2007-2009 financial crisis in Argentina. Besides the expected and well-documented relationship between crises and poverty levels, the main finding of this study is a strong effect on infant mortality and low weight at birth. Moreover, there is an asymmetry in these effects: the negative impact of downturns is greater than the positive evolution during recoveries. The results for education variables are more ambiguous, and even counter-cyclical in some cases. The document discusses the implications of these estimates for the current episode. Overall, these results provide evidence of permanent effects of economic crises through lower levels of human capital, worsening health outcomes and increased mortality.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/42949/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 42949.

as in new window
Length:
Date of creation: Nov 2010
Date of revision:
Handle: RePEc:pra:mprapa:42949

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: crisis; infant mortality; maternal mortality; low birth weight; poverty; Argentina;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Sarah Baird & Jed Friedman & Norbert Schady, 2011. "Aggregate Income Shocks and Infant Mortality in the Developing World," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 847-856, August.
  2. Peter R. Fallon & Robert E. B. Lucas, 2002. "The Impact of Financial Crises on Labor Markets, Household Incomes, and Poverty: A Review of Evidence," World Bank Research Observer, World Bank Group, World Bank Group, vol. 17(1), pages 21-45.
  3. Florencia Lopez-Boo, 2008. "How Do Crises Affect Schooling Decisions? Evidence from Changing Labor Market Opportunities and a Policy Experiment," Research Department Publications, Inter-American Development Bank, Research Department 4602, Inter-American Development Bank, Research Department.
  4. Bhalotra, Sonia, 2010. "Fatal fluctuations? Cyclicality in infant mortality in India," Journal of Development Economics, Elsevier, Elsevier, vol. 93(1), pages 7-19, September.
  5. Guillermo Cruces & Quentin Wodon, 2003. "Argentina’s crises and the Poor, 1995-2002," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0(1-2), pages 55-96, January-D.
  6. Guillermo Cruces & Leonardo Gasparini, 2008. "A Distribution in Motion: The Case of Argentina," CEDLAS, Working Papers, CEDLAS, Universidad Nacional de La Plata 0078, CEDLAS, Universidad Nacional de La Plata.
  7. Friedman, Jed & Schady, Norbert, 2009. "How many more infants are likely to die in Africa as a result of the global financial crisis ?," Policy Research Working Paper Series, The World Bank 5023, The World Bank.
  8. Christina Paxson & Norbert Schady, 2005. "Child Health and Economic Crisis in Peru," World Bank Economic Review, World Bank Group, World Bank Group, vol. 19(2), pages 203-223.
  9. Norbert R. Schady, 2004. "Do Macroeconomic Crises Always Slow Human Capital Accumulation?," World Bank Economic Review, World Bank Group, World Bank Group, vol. 18(2), pages 131-154.
  10. Marina Halac & Sergio L. Schmukler, 2004. "Distributional Effects of Crises: The Financial Channel," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  11. Ferreira, Francisco H. G. & Schady, Norbert, 2008. "Aggregate economic shocks, child schooling and child health," Policy Research Working Paper Series, The World Bank 4701, The World Bank.
  12. Schady, Norbert, 2006. "Early childhood development in Latin America and the Caribbean," Policy Research Working Paper Series, The World Bank 3869, The World Bank.
  13. Schady, Norbert & Smitz, Marc-Francois, 2010. "Aggregate economic shocks and infant mortality: New evidence for middle-income countries," Economics Letters, Elsevier, Elsevier, vol. 108(2), pages 145-148, August.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:42949. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.