External Shocks, Household Consumption and Fertility in Indonesia
This paper examines the impact of idiosyncratic income shocks on household consumption, educational expenditure and fertility in Indonesia, and assesses whether the investment in human capital of children and fertility are used to smooth household consumption. Using six different kinds of self-reported economic hardships, our findings indicate that coping mechanisms are rather efficient for Indonesian households that perceive an economic hardship. Only in case of unemployment we find a significant decrease in consumption spending and educational expenditure while fertility increases. Theses results indicate that households that perceive an unemployment shock use children as a means for smoothing consumption. Regarding the death of a household member or natural disaster we find that consumption even increases. These results are consistent with the argument that coping mechanisms even over-compensate the actual consumption loss due to an economic hardship. One important lesson from our findings is that different types of income shock may lead to different economic and demographic behavioral adjustments and therefore require specific targeted social insurance programs.
|Date of creation:||May 2009|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.oeaw.ac.at/vid/|
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.:
- Michael Grimm, 2006.
"Mortality and Survivors' Consumption,"
Discussion Papers of DIW Berlin
611, DIW Berlin, German Institute for Economic Research.
- Michael Grimm, 2006. "Mortality and survivor's consumption," Working Papers DT/2006/13, DIAL (Développement, Institutions et Mondialisation).
- Grimm, Michael, 2010. "Mortality and survivors' consumption," Economics Papers from University Paris Dauphine 123456789/4355, Paris Dauphine University.
- Grimm, Michael, 2006. "Mortality and survivors' consumption," Proceedings of the German Development Economics Conference, Berlin 2006 9, Verein für Socialpolitik, Research Committee Development Economics.
- Rosenzweig, Mark R. & Pitt, Mark M., 1984. "Agricultural Prices, Food Consumption and the Health and Productivity of Farmers," Bulletins 7471, University of Minnesota, Economic Development Center.
- Townsend, Robert M, 1994.
"Risk and Insurance in Village India,"
Econometric Society, vol. 62(3), pages 539-91, May.
- Townsend, R.M., 1991. "Risk and Insurance in Village India," University of Chicago - Economics Research Center 91-3, Chicago - Economics Research Center.
- Robert M. Townsend, . "Risk and Insurance in Village India," University of Chicago - Population Research Center 91-3a, Chicago - Population Research Center.
- repec:ese:iserwp:2005-13 is not listed on IDEAS
- Lisa A. Cameron & Christopher Worswick, 2003. "The Labor Market as a Smoothing Device: Labor Supply Responses to Crop Loss," Review of Development Economics, Wiley Blackwell, vol. 7(2), pages 327-341, 05.
- Takatoshi Ito & Andrew K. Rose, 2007. "Fiscal Policy and Management in East Asia, NBER-EASE, Volume 16," NBER Books, National Bureau of Economic Research, Inc, number ito_07-1.
- Duryea, Suzanne & Lam, David & Levison, Deborah, 2007. "Effects of economic shocks on children's employment and schooling in Brazil," Journal of Development Economics, Elsevier, vol. 84(1), pages 188-214, September.
- Skoufias, Emmanuel, 2003. "Economic Crises and Natural Disasters: Coping Strategies and Policy Implications," World Development, Elsevier, vol. 31(7), pages 1087-1102, July.
- Raj Chetty & Adam Looney, 2007.
"Income Risk and the Benefits of Social Insurance: Evidence from Indonesia and the United States,"
in: Fiscal Policy and Management in East Asia, NBER-EASE, Volume 16, pages 99-121
National Bureau of Economic Research, Inc.
- Raj Chetty & Adam Looney, 2005. "Income Risk and the Benefits of Social Insurance: Evidence from Indonesia and the United States," NBER Working Papers 11708, National Bureau of Economic Research, Inc.
- Cameron, L. & Worswick, C., 1998.
"Education Expenditure Responses to Crop Loss in Indonesia: A Gender Bias,"
Department of Economics - Working Papers Series
636, The University of Melbourne.
- Cameron, Lisa A & Worswick, Christopher, 2001. "Education Expenditure Responses to Crop Loss in Indonesia: A Gender Bias," Economic Development and Cultural Change, University of Chicago Press, vol. 49(2), pages 351-63, January.
- Rosenzweig, Mark R & Schultz, T Paul, 1985. "The Demand for and Supply of Births: Fertility and Its Life Cycle Consequences," American Economic Review, American Economic Association, vol. 75(5), pages 992-1015, December.
- Nikhil Roy & Andrew D. Foster, 1996. "The Dynamics of Education and Fertility: Evidence from a Family Planning Experiment"," Home Pages _073, University of Pennsylvania.
- Conley, Timothy G. & Galenson, David W., 1998. "Nativity and Wealth in Mid-Nineteenth-Century Cities," The Journal of Economic History, Cambridge University Press, vol. 58(02), pages 468-493, June.
When requesting a correction, please mention this item's handle: RePEc:vid:wpaper:0604. 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: (Frank Kolesnik)
If references are entirely missing, you can add them using this form.