Are African Households Heterogeneous Agents?: Stylized Facts on Patterns of Consumption, Employment, Income and Earnings for Macroeconomic Modelers

May 6, 2015

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Format: Chicago

Louise Fox. Are African Households Heterogeneous Agents?: Stylized Facts on Patterns of Consumption, Employment, Income and Earnings for Macroeconomic Modelers, (USA: International Monetary Fund, 2015) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper reviews the evidence on how households in Sub-Saharan Africa segment along consumption, income and earning dimensions relevant for quantitative macroeconomic policy models which incorporate heterogeneity. Key findings include the importance of home-grown food in the income and consumption of house-holds well up the income distribution, the lack of formal financial inclusion for all but the richest households, and the importance of non-wage income. These stylized facts suggest that an externally-generated macroeconomic shock and the short-term policy response would mainly affect the behavior and welfare of these richer urban households, who are also more likely to have the means to cope. Middle class and poor households, especially in rural areas, should be insulated from these external shocks but vulnerable to a wide range of structural factors in the economy as well as idiosyncratic shocks.

Subject: Employment, Income, Labor, National accounts, Personal income, Wages

Keywords: Africa, Employment, Household heterogeneity, Income, Inequality, Informal Labor Market, Labor Economics, Labor market, Low income, Macro Models, Macroeconomic Stabalization, Macroeconomics, Mobility, Off season, Personal income, Sub-Saharan Africa, Union wage effect, Wage earnings variation, Wage employment, Wage income, Wage job, Wage sector, Wages, West Africa, WP

Publication Details

Pages:

36
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/102
Stock No:

WPIEA2015102
ISBN:

9781484369968
ISSN:

1018-5941

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