Who is most vulnerable to macroeconomic shocks? Hypotheses tests using panel data from Peru

This paper attempts to identify which people are most vulnerable to a decline in welfare during a macroeconomic shock. After clarifying the difference between poverty and vulnerability, an analytical framework is presented and then applied to household panel data from Peru. Major findings are: households with better educated heads are less vulnerable; female headed households are not more vulnerable to decline than male headed households; households with more children are more vulnerable to macroeconomic shock; and transfer networks that may assist the poor in relatively stable periods do not appear to protect them during a major shock, with the exception of tranfers that originate from outside Peru. -Authors