Do natural disasters change savings and employment choices : evidence from Pakistan

The paper explores to what extent households adjust their savings and income strategies in response to floods. Using a detailed panel dataset that was assembled concurrently with two major flood events in Pakistan, evidence shows household economic adjustments. However, these appear to be temporary: affected farmers move away from agriculture as an immediate response to floods, but they return within a year. Flood affected households allocate a significant portion of their post-flood income to replenish livestock and seeds. The findings have policy implications in terms of strategies to develop nonfarm employment, and in financing economic migration to reduce income vulnerability.UK Government's Department for International Development (DfID)International Development Research Centre (IDRC