1. Shocks, income diversification and welfare in developing and transition countries
- Author
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Omar Mahmoud, Toman and Omar Mahmoud, Toman
- Abstract
This dissertation takes a welfare perspective to analyze how rural households in developing countries manage risks ex-ante and cope with shocks ex-post. The first part looks at risk-coping strategies and analyzes the socio-economic consequences of AIDS-related mortality in rural sub-Saharan Africa. Chapter 2 shows that households in rural Zambia are able to stabilize their per-capita incomes after the death of a prime-age member. Yet, risk-sharing arrangements appear to spread the burden beyond directly afflicted households. Chapter 3 demonstrates for North-Western Tanzania that the age at parental bereavement has important consequences for children's long-term capital accumulation in terms of both health and education. These effects, however, depend on the gender of the deceased parent. Preferences of the surviving parent partly protect same-sex children from the detrimental effects of orphanhood, suggesting that risks are not equally shared within households. The second part of the dissertation explores risk-management strategies and investigates the income diversification patterns of farm households in sub-Saharan Africa. Chapter 4 analyzes the dichotomy of the non-agricultural sector in Western Kenya and the resulting poverty and inequality implications. The results show that only rich households are able to overcome the entry barriers into high-return activities. Low-return activities, however, are not concentrated among the poor. The chapter also provides evidence that high-return non-agricultural activities are associated with increased agricultural productivity. Chapter 5 examines the determinants of diversification in Burkina Faso between 1994 and 2003. Diversification into non-agricultural activities appears to be mainly motivated by insurance motives. Yet, the patterns of diversification also reflect structural change offering better opportunities in the non-farm sector. The final part of the dissertation concentrates on Eastern Europe and looks at the we
- Published
- 2010