From Shock to Strategy: Post-Pandemic Lessons on Household Financial Adaptation in India

From Shock to Strategy: Post-Pandemic Lessons on Household Financial Adaptation in India | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article From Shock to Strategy: Post-Pandemic Lessons on Household Financial Adaptation in India Deepti Sharma, Arnab Mukherji This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-5623924/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This study leverages real-time panel data capturing the incidence of COVID-19-induced lockdowns in India over two years to analyze the effects on household financial decisions. Our findings unveil distinct impacts on consumption patterns, savings, and borrowing behaviors among households, particularly in districts witnessing higher inward labor migration. Notably, our analysis confirms the theoretical premise of the standard economic consumption smoothing model, observing the most pronounced effects in the short to medium term following the income shock due to the lockdown. This effect is notably significant amongst households with relatively limited access to financial markets, contributing to partial consumption smoothing mechanisms such as readjustment in consumption patterns and borrowings from limited sources. Furthermore, our study highlights a notable decline in household expenditures on education and health, signifying the nuanced impact of income shocks on household developmental outcomes. JEL codes: D14, E21, G51, G18 COVID-19 Economic shocks Consumption Smoothing Household Finance Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-5623924","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":391471230,"identity":"7bbeb491-e580-44b5-89c3-f51d4951234b","order_by":0,"name":"Deepti Sharma","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAABFklEQVRIiWNgGAWjYDCCAyDCAIyAoIIhASQCRMxghFPLAbiWM0RrYYBqYWyDaGHArZ6Bge9487HHHwoY7M3Zzz7d8HOeXR7fjdyDBxgqrBMb2HkPYNMieeZYugHQYYk7e9LNbvZuSy6WvJGXcIDhTHpiAzNfAjYtBjdyzCSAWhIMDqSx3eDdxpy44UaOwQHGtsNALTwGWLXcf/8NpMXe4Pwztpt/59RDtfzDo+UGDxtIC+OGG2lst3kbDkO1NODWInkmzdzgjIEEUOUzttsyx44nzjzzxuBAwrF04zYcWviOH372oOKPDdBhaWw339RUJ/YdzzH+8KHGWraf/wxWLUDABsQSaGIJUHE8WkbBKBgFo2AU4AEAh21tYGk/lV8AAAAASUVORK5CYII=","orcid":"","institution":"Ahmedabad University","correspondingAuthor":true,"prefix":"","firstName":"Deepti","middleName":"","lastName":"Sharma","suffix":""},{"id":391471231,"identity":"a76eec8a-c16e-489b-ad95-e254d8586c48","order_by":1,"name":"Arnab Mukherji","email":"","orcid":"","institution":"Indian Institute of Management Bangalore","correspondingAuthor":false,"prefix":"","firstName":"Arnab","middleName":"","lastName":"Mukherji","suffix":""}],"badges":[],"createdAt":"2024-12-11 11:38:20","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-5623924/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-5623924/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":74041326,"identity":"be76adac-f119-4aed-bf73-9a6b2925bf3e","added_by":"auto","created_at":"2025-01-17 08:24:20","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":619139,"visible":true,"origin":"","legend":"","description":"","filename":"SharmaetalCOVIDpaperJournalSubmission.pdf","url":"https://assets-eu.researchsquare.com/files/rs-5623924/v1_covered_70c903e8-77e0-4bb1-8ec2-fdba6da3bd66.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"From Shock to Strategy: Post-Pandemic Lessons on Household Financial Adaptation in India","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"COVID-19, Economic shocks, Consumption Smoothing, Household Finance","lastPublishedDoi":"10.21203/rs.3.rs-5623924/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-5623924/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis study leverages real-time panel data capturing the incidence of COVID-19-induced lockdowns in India over two years to analyze the effects on household financial decisions. 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