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Social capital as a coping mechanism for seasonal deprivation: the case of the Monga in Bangladesh

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  • Rejaul K. Bakshi

    (University of Rajshahi)

  • Debdulal Mallick

    (Deakin University)

  • Mehmet A. Ulubaşoğlu

    (Deakin University)

Abstract

The extreme hunger and deprivation that recurs every year in the lean season in northern Bangladesh, locally known as the Monga, is mainly due to the malfunctioning local labor and credit markets. Using data covering 5600 extreme poor households in the Monga-prone region, we investigate in detail the role of social capital in securing employment and obtaining informal loans. Correcting for the endogeneity of social capital by the heteroscedasticity-based method proposed by Klein and Vella (J Econom 154:154–164, 2010) and also by the standard IV method for a robustness check, we document that social capital plays an important role in obtaining both wage- and self-employment. We also document a weak negative effect of social capital on obtaining informal loans. We explain our results in terms of the role of horizontal and vertical components of our measures of social capital in influencing different outcomes.

Suggested Citation

  • Rejaul K. Bakshi & Debdulal Mallick & Mehmet A. Ulubaşoğlu, 2019. "Social capital as a coping mechanism for seasonal deprivation: the case of the Monga in Bangladesh," Empirical Economics, Springer, vol. 57(1), pages 239-262, July.
    • Handle: RePEc:spr:empeco:v:57:y:2019:i:1:d:10.1007_s00181-018-1438-3
    DOI: 10.1007/s00181-018-1438-3
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    More about this item

    Keywords

    Monga; Extreme seasonality; Social capital; Heteroscedasticity; Employment; Informal loan;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • P46 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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