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

Autores
Ajwad, Mohamed Ihsan; Haimovich, Francisco; Azam, Mehtabul
Año de publicación
2012
Idioma
español castellano
Tipo de recurso
documento de trabajo
Estado
versión enviada
Descripción
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.
Facultad de Ciencias Económicas
Materia
Ciencias Económicas
Simulation
poverty
crisis
social protection policies
Latvia
JEL: I31, I38, C15, H23
Nivel de accesibilidad
acceso abierto
Condiciones de uso
http://creativecommons.org/licenses/by-nc-sa/4.0/
Repositorio
SEDICI (UNLP)
Institución
Universidad Nacional de La Plata
OAI Identificador
oai:sedici.unlp.edu.ar:10915/129131

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network_name_str SEDICI (UNLP)
spelling Simulating the Impact of the 2009 Financial Crisis on Welfare in LatviaAjwad, Mohamed IhsanHaimovich, FranciscoAzam, MehtabulCiencias EconómicasSimulationpovertycrisissocial protection policiesLatviaJEL: I31, I38, C15, H23This 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.Facultad de Ciencias Económicas2012info:eu-repo/semantics/workingPaperinfo:eu-repo/semantics/submittedVersionDocumento de trabajohttp://purl.org/coar/resource_type/c_8042info:ar-repo/semantics/documentoDeTrabajoapplication/pdf1-22http://sedici.unlp.edu.ar/handle/10915/129131spainfo:eu-repo/semantics/altIdentifier/issn/1813-9450info:eu-repo/semantics/altIdentifier/doi/10.1596/1813-9450-5960info:eu-repo/semantics/openAccesshttp://creativecommons.org/licenses/by-nc-sa/4.0/Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0)reponame:SEDICI (UNLP)instname:Universidad Nacional de La Platainstacron:UNLP2025-09-29T11:31:02Zoai:sedici.unlp.edu.ar:10915/129131Institucionalhttp://sedici.unlp.edu.ar/Universidad públicaNo correspondehttp://sedici.unlp.edu.ar/oai/snrdalira@sedici.unlp.edu.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:13292025-09-29 11:31:03.061SEDICI (UNLP) - Universidad Nacional de La Platafalse
dc.title.none.fl_str_mv Simulating the Impact of the 2009 Financial Crisis on Welfare in Latvia
title Simulating the Impact of the 2009 Financial Crisis on Welfare in Latvia
spellingShingle Simulating the Impact of the 2009 Financial Crisis on Welfare in Latvia
Ajwad, Mohamed Ihsan
Ciencias Económicas
Simulation
poverty
crisis
social protection policies
Latvia
JEL: I31, I38, C15, H23
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
dc.creator.none.fl_str_mv Ajwad, Mohamed Ihsan
Haimovich, Francisco
Azam, Mehtabul
author Ajwad, Mohamed Ihsan
author_facet Ajwad, Mohamed Ihsan
Haimovich, Francisco
Azam, Mehtabul
author_role author
author2 Haimovich, Francisco
Azam, Mehtabul
author2_role author
author
dc.subject.none.fl_str_mv Ciencias Económicas
Simulation
poverty
crisis
social protection policies
Latvia
JEL: I31, I38, C15, H23
topic Ciencias Económicas
Simulation
poverty
crisis
social protection policies
Latvia
JEL: I31, I38, C15, H23
dc.description.none.fl_txt_mv 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.
Facultad de Ciencias Económicas
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.
publishDate 2012
dc.date.none.fl_str_mv 2012
dc.type.none.fl_str_mv info:eu-repo/semantics/workingPaper
info:eu-repo/semantics/submittedVersion
Documento de trabajo
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dc.language.none.fl_str_mv spa
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info:eu-repo/semantics/altIdentifier/doi/10.1596/1813-9450-5960
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
http://creativecommons.org/licenses/by-nc-sa/4.0/
Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0)
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rights_invalid_str_mv http://creativecommons.org/licenses/by-nc-sa/4.0/
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