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dc.titlePropagation and Insurance in Village Networks
dc.contributor.authorKinnan, Cynthia
dc.contributor.authorSamphantharak, Krislert
dc.contributor.authorTownsend, Robert
dc.contributor.authorVera-Cossio, Diego A.
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageLatin America and the Caribbean
dc.date.available2022-07-25T00:07:00
dc.date.issue2022-07-25T00:07:00
dc.description.abstractIn village economies, small firm owners facing idiosyncratic shocks adjust production by cutting spending and reducing employment. Households with whom they trade inputs and labor scale back their own businesses and reduce consumption. As effects reverberate through local economies, the aggregate indirect adverse effects are larger than the direct effects. Propagation is more severe when transmitted through labor networks as opposed to material supply-chain networks, and goes beyond input-output/sectoral considerations as it varies with network position, closeness to a shocked household, and network density. Participation in gift-giving insurance networks mitigates direct and hence indirect effects. Supply chain and labor networks are fragile as the broken links are not easily replaced, leading to persistent damage. Social gains from better-targeted safety nets are substantially higher than private gains.
dc.format.extent102
dc.identifier.doihttp://dx.doi.org/10.18235/0004385
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Propagation-and-Insurance-in-Village-Networks.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectEntrepreneurship
dc.subjectLabor
dc.subjectHealth
dc.subjectIntegrity Risk
dc.subjectHealth Expenditure
dc.subjectFirms Dynamics
dc.subjectInsurance
dc.subjectEconomy
dc.subjectSmall Business
dc.subjectPopulation Aging
dc.subjectHousing Market
dc.subjectHousing
dc.subjectSupply Chain
dc.subject.jelcodeD13 - Household Production and Intrahousehold Allocation
dc.subject.jelcodeD22 - Firm Behavior: Empirical Analysis
dc.subject.jelcodeI15 - Health and Economic Development
dc.subject.jelcodeQ12 - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
dc.subject.keywordsRisk sharing;Propagation;Production networks;Firms
idb.identifier.pubnumberIDB-DP-00960
idb.operationRG-K1415
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