Gendered Effects of Climate Shock, Formal and Informal Financial Institutions, and Welfare in Post-Conflict Somalia
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Date
2022-10
Authors
Mesfin, Hiwot
Ahmed, Musa Hasen
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research Consortium
Abstract
This study investigates the impact of climate shock on Somali households’ welfare
status, and examines the mediating roles of formal and informal financial institutions—
mobile banking and remittances—in enhancing households’ coping capacity. Using
representative panel data, we show that climate shock has adverse effects on multiple
welfare indicators for both female- and male-headed households. However, we find
that female-headed households are more likely to fall below the poverty line, have
a larger poverty depth, and shift their diet due to climate shock than male-headed
households. Interestingly, we find that remittances decrease following climate shock,
both on average and for female-headed households, but such reduction does not
have a significant adverse effect on the households’ coping ability. This could be
an indication that Somali households rely on other coping mechanisms to shocks
than remittances. Similarly, even though we find that mobile money increases the
likelihood of receiving remittances, we find no evidence that this translates into a
higher coping ability to climate shock. Further investigation is needed to identify
Somali households’ coping strategies
Description
Keywords
Climate shock; Financial institutions; Welfare; Post-conflict; Gender