How Do the Poor Cope with Shocks in Bangladesh? Evidence from Survey Data

Sharif, Iffath; Santos, Indhira; Rahman, Hossain Zillur; Zaman, Hassan

How Do the Poor Cope with Shocks in Bangladesh? Evidence from Survey Data

Autores

Sharif, Iffath

Santos, Indhira

Rahman, Hossain Zillur

Zaman, Hassan

Descripción

This paper uses household survey data collected in September-October 2009 on a nationally representative sample of 2,000 households in Bangladesh to examine the nature of shocks experienced by households over the preceding 12 months and the type of coping mechanisms that were adopted. The analysis finds that more than half the sample claimed to have faced a shock -- economic, health, climatic, or asset related -- over the previous year. Surprisingly, the non-poor face a larger share of these shocks compared with the poor. A closer look at this result shows that the non-poor report a significantly larger share of "asset-related" shocks, which is consistent with the fact that the poor have fewer assets to lose. Health-related shocks dominate and households appear to have coped with these shocks through savings and loans, help from friends, and depletion of assets. The results show that households, when faced with covariate shocks due to climatic reasons, are less able to cope. As would be expected, the poor are less able to cope with shocks compared with the non-poor; the poor are more likely to use coping mechanisms that could have negative welfare implications in the longer term, including the depletion of assets, reduction of essential consumption, and use of high-interest loans. Econometric analysis suggests that geographical location, socio-economic status, and access to microfinance all affect the ability to cope with shocks. Policy implications include the importance of developing safety nets that take into account the vulnerability to climate-related shocks and further developing the links between micro-finance and safety net programs.

Palabras clave

ACCESS TO CREDIT, ACCESS TO SAVINGS, ACCESS TO SERVICES, AGRICULTURAL PRODUCTS, BORROWING, BUSINESS ACTIVITIES, CAPITA EXPENDITURE, CASH TRANSFERS, CHILD GROWTH, CHRONIC POVERTY, CONSUMPTION EXPENDITURE, CONSUMPTION INSURANCE, COPING STRATEGIES, COVARIATE SHOCKS, CREDIT MARKETS, CREDIT PROGRAMS, CREDIT-WORTHINESS, DEBT, DESCRIPTION, DEVELOPMENT ECONOMICS, DOWRIES, DOWRY, ECONOMIC CRISIS, ECONOMIC DEVELOPMENT, ECONOMIC SHOCK, ECONOMIC SHOCKS, EDUCATION LEVELS, ENDOWMENTS, EX POST COPING STRATEGIES, EXPENDITURE, EXPENDITURE DISTRIBUTION, EXPLANATORY VARIABLES, EXPORT EARNINGS, EXTREME POVERTY, FEMALE, FINANCIAL ASSETS, FINANCIAL CRISIS, FINANCIAL MARKETS, FOOD CONSUMPTION, FOOD ITEMS, GENDER, GEOGRAPHIC LOCATION, HOMES, HOUSEHOLD CONSUMPTION, HOUSEHOLD HEAD, HOUSEHOLD HEADS, HOUSEHOLD INCOME, HOUSEHOLD POVERTY, HOUSEHOLD SIZE, HOUSEHOLD SURVEY, HOUSEHOLD SURVEY DATA, HOUSEHOLDS, HUMAN CAPITAL, HUMAN DEVELOPMENT, IDIOSYNCRATIC SHOCKS, INFORMAL CREDIT, INSURANCE, INSURANCE MARKETS, INTERNATIONAL BANK, INTERNATIONAL FOOD POLICY, INTERVENTIONS, JOB LOSS, LABOR SUPPLY, LOAN, LOSS OF EMPLOYMENT, MFIS, MICRO-CREDIT, MICRO-FINANCE, MICRO-FINANCE INSTITUTIONS, MICROCREDIT, MICROFINANCE, MICROFINANCE INSTITUTIONS, MONEY LENDERS, NUTRITION, PHYSICAL CAPITAL, POLITICAL ECONOMY, POOR, POOR HOUSEHOLDS, POPULATION CENSUS, POVERTY ASSESSMENT, POVERTY LINE, POVERTY RATES, POVERTY REDUCTION, POVERTY STATUS, PRODUCTIVE ASSETS, PUBLIC ASSISTANCE, PUBLIC SAFETY, PUBLIC SAFETY NET, PUBLIC SAFETY NETS, RECESSION, REMITTANCE, REMITTANCES, RISK SHARING, RURAL, RURAL AREAS, RURAL HOUSEHOLDS, SAFETY, SAFETY NET, SAFETY NET PROGRAMS, SAFETY NETS, SAVINGS, SELF-EMPLOYMENT, SHOCK, SMALL BUSINESS, SOCIAL PROTECTION, SOURCE OF INCOME, SOURCES OF INCOME, STANDARD ERRORS, STATISTICAL SIGNIFICANCE, URBAN AREA, URBAN AREAS, URBANIZATION, VILLAGES, VULNERABLE GROUP