Abstract:
This study identifies the extent to which various socioeconomic groups are
vulnerable to aggregate business cycle fluctuations. Socioeconomic groups are
classified by gender, location, employment status, education, income and age cohort.
The asymmetric behavior of aggregate economic growth indicates that some groups
gain less during recovery and boom phases and are thus most vulnerable to
recessions. A vulnerability index in calculated for different socioeconomic groups
and the empirical results show that employers with a graduate degree in Balochistan
are the most vulnerable group and that female workers are more vulnerable than
male workers. Additionally, the study employs panel data on inflation and
employment to investigate the implications of macroeconomic fluctuations on
vulnerable groups. The results indicate that food inflation has a strong negative
impact on real earnings, while nonfood inflation increases real earnings. The panel
data and vulnerability index findings are consistent with each other. The study also
presents policy implications for existing public social safety net programs and
prospective private social innovation programs targeting vulnerable households.
