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Advances in Social Sciences Research Journal – Vol. 10, No. 4

Publication Date: April 25, 2023

DOI:10.14738/assrj.104.14533.

Abdulaleem, M. A., Fakayode, S. B., & Adio, M. O. (2023). Effect of Income Shocks on Households’ Health and Consumption: A Case

Study of Civil Servant Farming Households in South West, Nigeria. Advances in Social Sciences Research Journal, 10(4). 377-389.

Services for Science and Education – United Kingdom

Effect of Income Shocks on Households’ Health and Consumption:

A Case Study of Civil Servant Farming Households in South West,

Nigeria

Abdulaleem, M. A.

Department of Agricultural Economics and Extension,

Faculty of Agriculture, Federal University Oye Ekiti.

Ekiti State, Nigeria

Fakayode, S. B.

Department of Agricultural Economics and Extension,

Faculty of Agriculture, Federal University Oye Ekiti.

Ekiti State, Nigeria

Adio, M. O.

Department of Agricultural Economics and Extension,

Faculty of Agriculture, Federal University Oye Ekiti.

Ekiti State, Nigeria

ABSTRACT

Income shocks have continued to aggravate conflicts in several parts of Nigeria and

many other countries of the world. The frequent occurrence of income shocks

among the populace coupled with a lack of effective coping mechanisms has

increased the households’ vulnerability to poverty, poor health, and lower food

consumption. This study examined the effects of income shocks on health and

consumption as well as the coping mechanisms adopted by the farming civil servant

households in Southwest, Nigeria. A multistage sampling technique was used to

select 360 farming Civil Servants used in the study. A combination of Descriptive

Statistics and the Likert Scale was used for the data analysis. The result revealed

that deteriorating health conditions ( = 3.79) and reduced food consumption ( =

3.28) were the major consequences of income shocks in the study area. The study

further revealed that sales of assets or property ( =2.59) and sourcing financial

support from affiliated religious bodies ( =2.59) remains the most common coping

strategies adopted by Civil Servants to mitigate income shocks in the study area.

Therefore, the study recommended the institutionalization of a Health Insurance

Scheme for Civil Servants to provide adequate and easy access to health care. Also,

to avoid assets and property loss, improving the standard of living of civil servants

through prioritized salary payment, access to the loan market, and empowerment

using incentives become imperative.

Keywords: Income Shock, Health, Consumption, South-West, Nigeria.

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Advances in Social Sciences Research Journal (ASSRJ) Vol. 10, Issue 4, April-2023

Services for Science and Education – United Kingdom

INTRODUCTION

A shock is an event that can trigger a decline in well-being which can affect individuals,

communities, regions, and nations (World Bank, 2010). A shock refers to a risk that causes

significant negative welfare effects like major income loss or major illness-related loss. In

economic terms, shocks can result in income or asset loss. Shocks can also cause other disutility

like pain and grief. According to [1], income shocks are the key drivers of conflicts, but the

direction of their effect is contentious. Civil conflicts such as general strikes, violent riots, and

civil wars have become the most common phenomena throughout the world, particularly in

developing countries, causing incidences of mass fatality and destruction to the natural

environment, physical infrastructures, human capital, social and political institutions.

According to [2], the majority of rural households that are mostly engaged in agriculture, are

particularly prone to ecological shocks like drought, flooding, crop pests, and livestock diseases,

which impact negatively their output and in turn reduce their receipts from agriculture.

Similarly, they are also more exposed to health shocks, illness, and death of household members

[2,3].

In developing countries, health shock is one of the most common idiosyncratic income shocks

and the main reason why households fall into poverty. Empirical research has shown that in

some African countries, households are unable to access formal markets in order to insure their

consumption against health shocks. In research carried out by [4], to investigate the factors that

lead to welfare loss from health shocks, and how to break the vulnerability from health shocks

in three Sub-Saharan Africa (SSA) countries, namely, Burkina Faso, Niger and Togo, the result

showed that about 39.04 percent 33.69 percent and 69.03 percent of households were

vulnerable to poverty in Burkina Faso, Niger, and Togo respectively. Interaction variables,

'health shocks and wealth' and 'health shocks and access to health insurance' had a significant

negative effect on reducing a household's vulnerability to poverty. Health insurance coverage

had a significant effect by increasing the incidence of welfare loss from health shocks.

Household size, type of health care used, gender, education and the age of the household head

as well as the characteristics of housing affect vulnerability to poverty.

Health, being a central part of individual human capita has direct and indirect implications for

human well-being and utility. In developed countries, an economic meltdown may result in

reduced household consumption of nutritious food and lower expenditure on other inputs.

After a health shock, individuals are more likely to transit into labour market inactivity and into

disability [5,6], health shocks are also found to decrease individual earnings [5, 7]. Health

shocks are unpredictable illness that declines the health status of households. These are one of

the most important factors connected with poverty in African countries.

Farm households in rural areas of Nigeria are naturally prone to various forms of idiosyncratic

and covariate shocks. The frequent occurrence of shocks among the households coupled with a

lack of effective shock coping mechanisms in the region has made the households vulnerable to

poverty [8]. Households facing health shocks may find themselves permanently impoverished

due to loss of income associated with illness and the cost of access to health care. Health shocks

are sudden deterioration of an individual’s health, caused by illness and injury. Households

facing health shocks are often affected by both the payments for medical treatment and the

income loss from an inability to work.