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Household Responses to Adverse Income Shocks in Latin America

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  • Gaviria Alejandro

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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 on human capital investments, (ii) that poor households are most likely to be affected by adverse income shocks, and (iii) that lower-middle class households are more likely to cut back 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 targeted at the poor.

Suggested Citation

  • Gaviria Alejandro, 2002. "Household Responses to Adverse Income Shocks in Latin America," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE, March.
  • Handle: RePEc:col:000090:004100
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    References listed on IDEAS

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    1. 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.
    2. Nora Lustig, 2000. "Crises and the Poor: Socially Responsible Macroeconomics," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2000), pages 1-30, August.
    3. Alejandro Gaviria & Carmen Pagés-Serra, 1999. "Patterns of Crime Victimization in Latin America," Research Department Publications 4186, Inter-American Development Bank, Research Department.
    4. Alejandro Gaviria Uribe, 2000. "¿Sobre quién ha recaído el peso de la crisis?," COYUNTURA SOCIAL 012962, FEDESARROLLO.
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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. 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.
    3. Pierre-Richard Agénor, 2004. "Macroeconomic Adjustment and the Poor: Analytical Issues and Cross-Country Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 18, pages 351-408, July.
    4. Luz Magdalena Salas Bahamón & Fabio Sánchez Torres, 2004. "How do the Colombian Families Respond to the Changes in the Economic Conditions?," IDB Publications (Working Papers) 4397, Inter-American Development Bank.
    5. Juan José Echavarría & Enrique López & Sergio Ocampo, 2011. "Choques, instituciones laborales y desempleo en Colombia," Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 29(66), pages 128-173, Diciembre.
    6. 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.
    7. World Bank, 2004. "Uruguay : Poverty Update 2003," World Bank Other Operational Studies 15682, The World Bank.

    More about this item

    Keywords

    Social safety nets; targeting of public programs; coping strategies;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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