Cohort risk sharing in Pakistan: Relative wage and consumption movements over time

Authors

  • Syed Hassan Raza School of Social Sciences and Humanities, National University of Science and Technology, Pakistan

DOI:

https://doi.org/10.34260/jaebs.414

Keywords:

Insurance, Risk, Consumption Smoothing

Abstract

This study analyzes to which extent the distribution of consumption is affected by the relative wage movement among birth cohorts and education groups. Our empirical design is based on a synthetic panel constructed using repeated cross-sectional data from “Household Integrated Economic Survey of Pakistan.” We limit our analysis to persons aged between 26 to 50 years at the time of survey. To see the evolution of change in income and consumption we measured growth by taking 6, 8- and 10-years’ difference respectively. The findings ascertained there is limited risk-sharing across cohort-education groups in Pakistan, but the measured extent of risk-sharing increases over longer horizons. Furthermore, we observe relatively higher consumption smoothing among the less educated people over the period of ten years. In the university education group, results reveal less consumption smoothing in the shorter, six- and eight-year time periods.  The study concludes that the relative risk-sharing over a decade is better in Pakistan than the shorter growth horizon.

Article

Published

2020-03-30

How to Cite

Raza, S. H. (2020). Cohort risk sharing in Pakistan: Relative wage and consumption movements over time . Journal of Applied Economics and Business Studies, 4(1), 77-96. https://doi.org/10.34260/jaebs.414

Issue

Section

Articles