Political Instability And Labor Income Shocks In Madagascar

Abstract

Political instability causes the widespread loss of income for nearly all subpopulations of a country. However, it is not the case that all people lose a constant share of their income. Using a case of political instability in Madagascar that caused incredible disruption to the economy, I analyze the effect of political instability on two groups, women and the well educated. I find that women are more vulnerable to income loss and that this may be the reason political instability leads to worse human development indices than would be predicted solely by income. I also find the well-educated have some form of coping mechanism that allows them to better assess the economic environment and find a way to maintain their labor income.