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Mortality Shocks and Household Consumption: The Case of Mexico

Author

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  • Marek Sedivy

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Opletalova 26, 110 00, Prague, Czech Republic)

Abstract

We study the effect of within-household mortality on the evolution of household per capita consumption. Relying on a panel survey of Mexican households, we find that these households were capable of perfectly smoothing the shock into their consumption caused by the death of a household member. Our findings indicate that a household´s ability to smooth consumption depends neither on the characteristics of the deceased household member nor on the income of a particular household. We find no clear temporal pattern in the evolution of the shock caused by within-household mortality. Our results provide strong support for the hypothesis that the evolution of household consumption is not affected by within-household mortality. Despite being the best available, existing data is still imperfect, and we therefore call for better data in the form of MNCs´ unconsolidated, public country-by-country reporting data.

Suggested Citation

  • Marek Sedivy, 2020. "Mortality Shocks and Household Consumption: The Case of Mexico," Working Papers IES 2020/22, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Aug 2020.
  • Handle: RePEc:fau:wpaper:wp2020_22
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    File URL: https://ies.fsv.cuni.cz/sci/publication/show/id/6268/lang/en
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    More about this item

    Keywords

    consumption; consumption smoothing; death; mortality;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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