Coping with COVID-19 shocks in rural Nepal

Abstract

We examine shocks experienced by rural Nepali households during the COVID-19 pandemic. Households primarily experienced income and price shocks during a government-imposed lockdown. During this time, households managed to effectively protect consumption, and mostly relied on credit (26%), asset sales (10%) and savings (8%). Debt levels nearly doubled, with limited changes to savings. We then leverage a long-term randomized control trial (RCT) to assess whether beneficiaries of a livestock livelihood program are more resilient. Program beneficiaries are 6 percentage points less likely to take out new loans.