Argentina: Macroeconomic Crisis and Household Vulnerability

By Gabriela Inchauste, Ana Corbacho, Mercedes Garcia-Escribano

April 1, 2003

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Gabriela Inchauste, Ana Corbacho, and Mercedes Garcia-Escribano. Argentina: Macroeconomic Crisis and Household Vulnerability, (USA: International Monetary Fund, 2003) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Using urban household surveys, we constructed a panel dataset to study the effects of the Argentine macroeconomic crisis of 1999-2002 with the aim of (1) identifying the most vulnerable households, (2) investigating whether employment in the public sector and government spending served to decrease vulnerability, and (3) understanding the mechanisms used by households to smooth the effects of the crisis. Households whose heads were male, less educated, and employed in the construction sector were more vulnerable to the crisis, experiencing larger-than-average declines in income and higher dispersion. Households whose heads were employed in the public sector were more protected from the crisis, although higher public spending did not serve to decrease their vulnerability. A significant source of vulnerability was linked to changes in employment status, and we studied the determinants of the probability of being unemployed and of becoming unemployed. Last, we found that households were unable to perfectly smooth income shocks. Given these results, there is room for broadening social safety nets, particularly in the form of public works programs.

Subject: Income shocks, Labor, Labor markets, National accounts, Personal income, Unemployment, Wages

Keywords: Argentina, Government spending, Household income, Household welfare, Income shocks, Income source, Interest income, Labor income, Labor markets, Macroeconomic crisis, Personal income, Private sector, Sources of the head of household, Wages, WP

Publication Details

Pages:

38
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2003/089
Stock No:

WPIEA0892003
ISBN:

9781451851304
ISSN:

1018-5941

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