Precautionary Wealth and Financial Access : Evidence from Afghanistan

Households accumulate wealth as a reserve against unexpected contingencies. We employ a detailed household survey in Afghanistan to study how non-housing wealth accumulation of households varies with labor income uncertainty. We find that households facing higher income uncertainty accumulate si...

Full description

Bibliographic Details
Main Authors: Aghabarari, Leila, Rostom, Ahmed, Sinha, Rishabh
Format: Report
Language:English
Published: World Bank, Washington, DC 2018
Subjects:
Online Access:http://documents.worldbank.org/curated/en/334701522101910190/Precautionary-wealth-and-financial-access-evidence-from-Afghanistan
http://hdl.handle.net/10986/30040
Description
Summary:Households accumulate wealth as a reserve against unexpected contingencies. We employ a detailed household survey in Afghanistan to study how non-housing wealth accumulation of households varies with labor income uncertainty. We find that households facing higher income uncertainty accumulate significantly larger quantities of non-housing wealth. Exploiting variation in availability of banks and micro-finance institutions across provinces, we find lower wealth accumulation in provinces having better access to financial institutions.