Do natural disasters change savings and employment choices? Evidence from Pakistan and Bangladesh


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Rural households remain vulnerable to climatic extremes and non-farm employment opportunities can help reduce income and livelihood vulnerabilities. Pakistan and Bangladesh are among the countries most vulnerable to livelihood risks arising from frequent exposure to large-scale natural disasters. This working paper, part of PRISE Research Area 5 on Property rights, investments and economic development in the context of climate change in semi-arid lands and the Asian Development Bank Economics Working Paper Series, studies household responses to floods and storms in terms of short-term changes to their dependence on agriculture.

The results show that rural households temporarily move away from agriculture in response to disaster then come back after a short period of time. They therefore remain vulnerable to climatic extremes. The development of non-farm employment opportunities in rural areas can therefore be a useful public policy to lower their dependence on agriculture and reduce their income and livelihood vulnerabilities.



Image: A father evacuates his children, by Reuters/ Adrees Latif

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