Argentina: Macroeconomic Crisis and Household Vulnerability

IMF Working Papers, April 1, 2003

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Argentina: Macroeconomic Crisis and Household Vulnerability

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Bibliographic details

• Authors: Gabriela Inchauste, Ana Corbacho, Mercedes Garcia-Escribano
• Published: April 1, 2003
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451851304.001

Study objectives

• Construct a panel dataset from urban household surveys to study the effects of the Argentine macroeconomic crisis of 1999-2002.
• Aim to:
  • (1) identify the most vulnerable households,
  • (2) investigate whether employment in the public sector and government spending served to decrease vulnerability, and
  • (3) understand the mechanisms used by households to smooth the effects of the crisis.

Key findings

• Vulnerable household characteristics:
  • Households whose heads were male, less educated, and employed in the construction sector were more vulnerable to the crisis.
  • These households experienced larger-than-average declines in income and higher dispersion.
• Public sector employment and government spending:
  • Households whose heads were employed in the public sector were more protected from the crisis.
  • Higher public spending did not serve to decrease household vulnerability.
• Employment dynamics:
  • A significant source of vulnerability was linked to changes in employment status.
  • The study examined determinants of the probability of being unemployed and of becoming unemployed.
• Income smoothing:
  • Households were unable to perfectly smooth income shocks.

Mechanisms analyzed

• Employment status changes as a driver of vulnerability.
• Sources of household income and their role in absorbing shocks (explicitly studied: labor income, interest income, and other income sources as indicated by keywords).

Policy implications and recommendations

• There is room for broadening social safety nets.
• Particular recommendation: expansion in the form of public works programs.

Content in this bundle

• Argentina: Macroeconomic Crisis and Household Vulnerability - WP/03/89
  • Argentina: Macroeconomic Crisis and Household Vulnerability - WP/03/89 (Markdown version)
  • Argentina: Macroeconomic Crisis and Household Vulnerability - WP/03/89 (PDF)