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Argentina: Macroeconomic Crisis and Household Vulnerability
Author:
Ms. Gabriela Inchauste
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Ms. Ana Corbacho null

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Ms. Mercedes Garcia-Escribano null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2003: Issue 089
Language:
English
Publication Date:
01 Apr 2003
DOI:
https://doi.org/10.5089/9781451851304.001
ISBN:
9781451851304
ISSN:
1018-5941
Pages:
38
Keywords:
WP; private sector; government spending; Argentina; macroeconomic crisis; household welfare; household income; labor income; income source; interest income; sources of the head of household; Personal income; Income shocks; Wages; Labor markets
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund