Vulnerability to Poverty: A Microeconometric Approach and Application to the Republic of Haiti

This paper investigates vulnerability to poverty in Haiti. Research in vulnerability in developing countries has been scarce due to the high data requirements of vulnerability studies (e.g. panel or long series of cross-sections). The methodology adopted here allows the assessment of vulnerability to poverty by exploiting the short panel structure of nested data at different levels. The decomposition method reveals that vulnerability in Haiti is largely a rural phenomenon and that schooling correlates negatively with vulnerability. Most importantly, among the different shocks affecting household’s income, it is found that meso-level shocks are in general far more important than covariate shocks. This finding points to some interesting policy implications in decentralizing policies to alleviate vulnerability to poverty.