Safety Nets or Social Insurance in the Presence of Poverty Traps? Evidence from Southern Ethiopia

Little is known about the fiscal costs of natural disasters, especially regarding social safety nets that do not specifically target extreme weather events. This paper shows that US hurricanes lead to substantial increases in non-disaster government transfers, such as unemployment insurance and public medical payments, in affected counties in the decade after a hurricane. The present value of this increase significantly exceeds that of direct disaster aid. This implies, among other things, that the fiscal costs of natural disasters have been significantly underestimated and that victims in developed countries are better insured against them than previously thought. (JEL H51, H53, H84, J65, Q54)

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Poverty Traps and Safety Nets

Poverty, Inequality and Development - Economic Studies in Inequality, Social Exclusion and Well-Being ◽

10.1007/0-387-29748-0_8 ◽

2006 ◽

pp. 131-154 ◽

Cited By ~ 24

Author(s):

Christopher B. Barrett ◽

John G. McPeak

Keyword(s):

Poverty Traps ◽

Safety Nets

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Theory and Instruments of Social Safety Nets and Social Insurance in Islamic Finance: Takaful and Ta’min

Economic Development and Islamic Finance ◽

10.1596/9780821399538_ch08 ◽

2013 ◽

pp. 231-252

Keyword(s):

Social Insurance ◽

Islamic Finance ◽

Safety Nets ◽

Social Safety Nets

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Commons as insurance: safety nets or poverty traps?

Environment and Development Economics ◽

10.1017/s1355770x08004993 ◽

2009 ◽

Vol 14 (3) ◽

pp. 305-322 ◽

Cited By ~ 21

Author(s):

PHILIPPE DELACOTE

Keyword(s):

Developing Countries ◽

Common Property ◽

Private Insurance ◽

Economic Stress ◽

Poverty Traps ◽

Poverty Trap ◽

Potential Solution ◽

Safety Nets ◽

Common Property Resources ◽

Insurance Mechanism

ABSTRACTCommon property resources are often used by households of developing countries as insurance in case of economic stress. The aim of this paper is to consider the potential poverty-trap implications of this use. If the capacity of the resource is low, or if the population in need of insurance is too large, the households are trapped in CPR extraction activity and cannot get more than their subsistence requirement. In this context, cooperation between households and the introduction of a cooperative insurance mechanism may sustain an equilibrium outside the poverty trap and relax pressure on the resource. Moreover, private insurance schemes could also be a potential solution to this poverty trap.

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