Household Vulnerability to Income Shocks in Emerging and Developing Asia: the Case of Cambodia, Nepal and Vietnam

IMF Working Papers, April 1, 2022

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Leveraging survey data from emerging and developing Asia to analyze household vulnerability to income shocks arising from the Covid-19 pandemic.
Focus countries: Cambodia, Nepal, and Vietnam.
Main drivers of vulnerability identified: occupation and ex-ante income levels.
Estimated impact: the pandemic could have placed an additional 6 to 9 percent of the population of each country in a vulnerable position.
Impact concentrated on urban, informal, and service sector workers.
Government intervention and financial access emerge as key resilience-enhancing mechanisms.

Cambodia: occupation is highlighted as a key aspect of household vulnerability to income shocks.
Nepal: emphasis on self-insurance mechanisms as a component of household resilience.
Vietnam: financial leverage is emphasized as a driver of household vulnerability.

Occupation and pre-shock income are primary indicators for targeting vulnerability-reduction measures.
Strengthening government intervention can enhance household resilience to pandemic-related income shocks.
Improving financial access is a critical mechanism to reduce vulnerability and bolster recovery pathways.