Household Responses to Economic and Demographic Shocks: Marginal Logit Analysis using Indonesian Data

We analyse the responses of Indonesian households to demographic and economic shocks and examine how these responses vary in relation to the household's permanent income and the extent to which the shock is common across the community. Households respond in different ways to demographic and economic shocks. Economic shocks are more likely to result in a labour supply response from the household and this probability is further increased if the shock is common. For rural households, use of savings increases with permanent income. The article also examines the role of the interviewer in influencing survey responses.