After three decades of sustained economic growth, Indonesia is in the throes of a major economic crisis. This project will assess the impact of the crisis on the well-being of the population, identifying who has been affected, how they have been affected and how they have responded to the crisis. The project begins with an examination of the extent to which households are able to smooth their consumption in the face of unanticipated income innovations. In addition to characterizing those who are better able to smooth consumption, attention will be paid to the role the individual, household, family and community play in mitigating the deleterious effects of the crisis. Some of the key coping strategies that have been adopted in response to the crisis will be highlighted. The project will then step beyond consumption and conduct a parallel set of analyses that examine the impact of the crisis on a broad array of welfare indicators including, for example, how the household budget is spent, the allocation of time of individuals, investments in health care and schooling, as well as indicators of health status and education attainment. Data are drawn primarily from the Indonesian Family Life Survey, a longitudinal household and community survey begun in 1993. The second wave was completed in 1997, just before the Indonesian rupiah collapsed. A resurvey conducted a year later was designed specifically for this project. Those data permit an assessment of the immediate effects of the crisis. This evidence will be contrasted with data on the medium term effects drawn from the next wave of the survey, conducted in 2000. In addition to tracing the evolution of the broad array of indicators of well-being through the crisis, these panel data will provide a unique opportunity to examine the medium term consequences of coping strategies adopted as the crisis was unfolding. In addition, the unanticipated nature of the crisis affords an opportunity to test implications of the hypothesis that households behave as if markets are complete.

National Institute of Health (NIH)
Eunice Kennedy Shriver National Institute of Child Health & Human Development (NICHD)
Research Project (R01)
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Social Sciences, Nursing, Epidemiology and Methods 4 (SNEM)
Program Officer
Evans, V Jeffery
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Rand Corporation
Santa Monica
United States
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Hamoudi, Amar; Thomas, Duncan (2014) Endogenous coresidence and program incidence: South Africa's Old Age Pension. J Dev Econ 109:30-37
McKelvey, Christopher; Thomas, Duncan; Frankenberg, Elizabeth (2012) Fertility Regulation in an Economic Crisis. Econ Dev Cult Change 61:7-38
Friedman, Jed; Thomas, Duncan (2009) Psychological Health Before, During, and After an Economic Crisis: Results from Indonesia, 1993 - 2000. World Bank Econ Rev 23:57-76