Do natural disasters change savings and employment choices? Evidence from Bangladesh and Pakistan

This paper explores household-level responses to extreme weather events in Bangladesh and Pakistan, which are among the most disaster-prone countries in the world. In particular, the frequency of extreme floods is on the rise in Bangladesh and Pakistan. During 2000–2015, Bangladesh experienced a total of 29 floods and 40 storms, resulting in nearly 8,000 deaths and $5,600 million in losses from damage to property, crops, and livestock (EM-DAT 2016). During the same period, Pakistan experienced a total of 45 floods and five storms, resulting in nearly 6,000 deaths and $20,700 million in losses (EM-DAT 2016). These two countries today host populations of similar sizes and share the same history, having been carved out of a unified country that existed during 1947–1971. The agriculture sector, the primary victim of climatic extremes, contributes a similar share of gross domestic product (GDP) in the two countries. Their shared history and comparable socioeconomic characteristics make Bangladesh and Pakistan suitable comparators to explore the adaptation responses by households.