Alejandro de la Fuente

Natural Disasters, Human Development and Poverty at the Municipal Level in Mexico

Abstract This article analyses the effects of natural disasters on human development and poverty levels at the municipal level in Mexico. Using several sources, we build a panel of data in order to uncover if different natural shocks can affect social indicators. After controlling for geographic and natural characteristics which can make municipalities more hazard prone, as well as for other institutional, socio-economic and demographic pre-shock characteristics, in addition to using fixed effects, we find that general shocks, especially from floods and droughts, lead to significant drops in both types of indicator.

Vulnerability to Poverty in Rural Malawi

Considerations of risk and vulnerability are key to understanding the dynamics of poverty in rural Malawi. This study measures vulnerability to consumption shortfalls and analyzes its sources using a two-period panel of 2,789 households, drawn from the 2010 Third Integrated Household Survey and the 2013 Integrated Household Panel Survey. The results show that in 2010 two-fifths of all households had a chance of at least 40 percent of falling below the poverty line in the future. The results show that many households in rural Malawi are vulnerable to poverty, although, as with many other studies of rural areas in other countries, much of the vulnerability is caused by chronic poverty. Nonetheless, risks, particularly rainfall and loss of off-farm employment, are also important in explaining why poor households remain poor, and why some non-poor households are more likely to fall into poverty in the next period. Household wealth and agricultural assets can protect households from falling into poverty and reduce the severity of the fall when shocks occur. However, there is little evidence to suggest that other strategies to reduce vulnerability are effective.

Municipal Vulnerability to Climate Change and Climate-Related Events in Mexico

A climate change vulnerability index in agriculture is presented at the municipal level in Mexico. Because the index is built with a multidimensional approach to vulnerability (exposure, sensitivity and adaptive capacity), it represents a tool for policy makers, academics and government alike to inform decisions about climate change resilience and regional variations within the country. The index entails baseline (2005) and prediction (2045) levels based on historic climate data and future-climate modeling. The results of the analysis suggest a wide variation in municipal vulnerability across the country at baseline and prediction points. The vulnerability index shows that highly vulnerable municipalities demonstrate higher climate extremes, which increases uncertainty for harvest periods, and for agricultural yields and outputs. The index shows at baseline that coastal areas host some of the most vulnerable municipalities to climate change in Mexico. However, it also shows that the Northwest and Central regions will likely experience the largest shifts in vulnerability between 2005 and 2045. Finally, vulnerability is found to vary according to specific variables: municipalities with higher vulnerability have more adverse socio-demographic conditions. With the vast municipal data available in Mexico, further sub-index estimations can lead to answers for specific policy and research questions.

The Poverty Impact of Climate Change in Mexico

This paper examines the effects of climate change on poverty through the relationship between indicators of climate change (temperature and rainfall change) and municipal level gross domestic product, and subsequently between gross domestic product and poverty. The evidence suggests that climate change could have a negative impact on poverty by 2030. The paper proposes a two-stage least squares regression where it first regresses temperature and rainfall (along with geographic controls and state and year fixed effects) on municipal gross domestic product per capita for 2000 and 2005 The resulting gross domestic product per capita is used in a second equation to estimate municipal poverty on the same years. The authors then incorporate projections of temperature and rainfall changes by 2030 into the estimated climate-gross domestic product coefficients to assess the effects of climate change in economic activity and how this in turn will influence poverty. At the same time, they account for the potential adaptive capacity of municipalities through higher population densities and economic growth. Both would reduce poverty by 31.72 percentage points between 2005 and 2030 with changing climate. However, poverty could have been reduced up to 34.15 percentage points over the same period had there been no climate change. This suggests that climate change slows down the pace of poverty reduction. An alternative reading is that poverty is expected to increase from 15.25 percent (without climate change) to 17.68 percent (with climate change) by 2030. Given the existing population projections for 2030, this represents 2,902,868 people remaining in poverty as a result of climate change.

Living on the Edge

Abstract Social policy in Mexico has focused on identifying and supporting households in extreme poverty. Yet, the country has a significant number of households just above the poverty line who are not eligible, by definition, for antipoverty programmes and are at risk of falling into poverty in the event of adverse shocks without appropriate social safety nets. This study uses cross-section and longitudinal data to understand better the profile of those ‘vulnerable’ households, their risk exposure, and the extent to which they are covered by public transfers and insurance mechanisms. The analysis shows that until 2010 most social programmes, including the few with productive components, barely covered the vulnerable. The study calls for public policies to pay attention to the vulnerable and find a policy mix on the continuum between targeted interventions and universal insurance schemes to serve this income group.