From Vulnerability to Resilience: Households’ Exposure to shocks and Coping Mechanisms in Egypt

Managing risks and reducing vulnerability to shocks affect the welfare of households and resilience of economies. Using two rounds of Egypt’s Labor Market Panel Survey (ELMPS), 2018 and 2023, this paper examines different types of shocks experienced by households over the few past years as well as vulnerability to food insecurity. It highlights important factors that contribute to resilience and identifies opportunities for strengthening effective risk management strategies. The findings highlight a remarkable increase in household exposure to shocks, rising from 16 percent in 2018 to 49 percent in 2023. Households who reported exposure to shocks in 2018 and 2023 are primarily from poorer and larger households, indicating a potential chronic vulnerability. Urban households have experienced more shocks compared to rural counterparts in 2023, highlighting the need for strategies that address the specific vulnerabilities of urban households. Higher resilience to shocks and food insecurity was reported by households pertaining to high wealth quintiles and whose heads are more educated or employed in the formal sector. This emphasizes the crucial role of social protection measures and economic opportunities in building resilience. Coping mechanisms primarily included consumption rationing, with a notable decline in reliance on social capital compared to 2018. Around 40 percent of households faced food insecurity in 2023, with those experiencing economic shocks being more susceptible to higher rates of moderate and severe food insecurity. A higher share of female headed households reported severe food insecurity. Expanding access to social insurance programs and ensuring they cover irregular/informal workers can better mitigate the impacts of economic and health-related shocks, ensuring less persistent effect on food insecurity