Simulating the Impact of the 2009 Financial Crisis on Welfare in Latvia

This note details simulations of the distributional impacts of the 2009 financial crisis on households in Latvia. It uses household survey data collected prior to the crisis and simulates the impact of the growth slowdown. The simulations show that Latvia experienced a sharp rise in poverty, widenin...

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Detalles Bibliográficos
Autores principales: Ajwad, Mohamed Ihsan, Haimovich, Francisco, Azam, Mehtabul
Formato: Articulo Documento de trabajo
Lenguaje:Español
Publicado: 2012
Materias:
Acceso en línea:http://sedici.unlp.edu.ar/handle/10915/129131
Aporte de:
id I19-R120-10915-129131
record_format dspace
institution Universidad Nacional de La Plata
institution_str I-19
repository_str R-120
collection SEDICI (UNLP)
language Español
topic Ciencias Económicas
Simulation
poverty
crisis
social protection policies
Latvia
JEL: I31, I38, C15, H23
spellingShingle Ciencias Económicas
Simulation
poverty
crisis
social protection policies
Latvia
JEL: I31, I38, C15, H23
Ajwad, Mohamed Ihsan
Haimovich, Francisco
Azam, Mehtabul
Simulating the Impact of the 2009 Financial Crisis on Welfare in Latvia
topic_facet Ciencias Económicas
Simulation
poverty
crisis
social protection policies
Latvia
JEL: I31, I38, C15, H23
description This note details simulations of the distributional impacts of the 2009 financial crisis on households in Latvia. It uses household survey data collected prior to the crisis and simulates the impact of the growth slowdown. The simulations show that Latvia experienced a sharp rise in poverty, widening of the poverty gap, and a rise in income inequality due to the economic contraction in 2009. The 18 percent contraction in gross domestic product (affecting mainly trade hotels and restaurants, construction, and manufacturing) likely led the poverty head count to increase from 14.4 percent in 2008 to 20.2 percent in 2009. The poverty gap, which measures the national poverty deficit, was simulated to increase from 5.9 percent in 2008 to 8.3 percent in 2009. The analysis finds that the results are robust to most assumptions except post-layoff incomes, which substantially mitigated household welfare. The authors also simulate the impact of Latvia's Emergency Social Safety Net components and find that the Safety Net likely mitigated crisis impacts for many beneficiaries. The simulations measure only direct short-run impacts; hence, they do not take into account general equilibrium effects. Post-crisis income data from a different data source suggest that poverty rates increased by 8.0 percentage points between 2008 and 2009. As a result, the authors suggest that their ex-ante simulation performs reasonably well and is a useful tool to identify vulnerable groups during the early stages of a crisis.
format Articulo
Documento de trabajo
author Ajwad, Mohamed Ihsan
Haimovich, Francisco
Azam, Mehtabul
author_facet Ajwad, Mohamed Ihsan
Haimovich, Francisco
Azam, Mehtabul
author_sort Ajwad, Mohamed Ihsan
title Simulating the Impact of the 2009 Financial Crisis on Welfare in Latvia
title_short Simulating the Impact of the 2009 Financial Crisis on Welfare in Latvia
title_full Simulating the Impact of the 2009 Financial Crisis on Welfare in Latvia
title_fullStr Simulating the Impact of the 2009 Financial Crisis on Welfare in Latvia
title_full_unstemmed Simulating the Impact of the 2009 Financial Crisis on Welfare in Latvia
title_sort simulating the impact of the 2009 financial crisis on welfare in latvia
publishDate 2012
url http://sedici.unlp.edu.ar/handle/10915/129131
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