Yibo Zhang

and 2 more

This study uses data from the China Family Tracking Survey (CFPS) to empirically evaluate how natural disasters affect household financial vulnerability. The mechanism analysis demonstrates that natural catastrophes considerably increase household financial vulnerability through an increase in the ratio of liquid assets that are difficult to use for unforeseen expenses, an increase in credit restrictions, and a decline in health. Additionally, even after a number of robustness tests, the results are still significant. Further study reveals that households' savings and income are considerably reduced by natural disasters. Second, persons are more likely to have household financial fragility during a disaster if they have low income levels, poor social networks, and low human capital. Again, even taking into account the severity of the disaster, household financial vulnerability is still greatly increased by droughts, floods, pests that affect agriculture and forestry, and diseases. Finally, the examination of various financial situations shows that, in addition to increasing household financial vulnerability, natural disasters also lower the financial position of financially free, excessively consumerist, and liquid families. In addition to offering some new perspectives and empirical support for understanding the elements that influence household financial vulnerability, the study presented in this paper also gives some guidance for disaster prevention and post-disaster assistance.