simulations as key determinants of the impact of the crisis on poverty.<sup>30</sup> Loss of labor income in the industry sector emerges as an important determinant of the impact as well. These indicators also have the advantage of being relatively easy to monitor – with administrative or financial data (for remittances), and quick market or household surveys (prices and wages).

The argument for tracking wages as a part of rapid monitoring, rather than other types of incomes or employment, is twofold. First, growth slowdown in a country like Bangladesh is more likely to be manifested in lower earnings rather than open unemployment – a hypothesis supported by our results as well. Second, while wages represent only a _part_ of the labor earnings from a sector, wages are much easier to track (e.g. through quarterly labor force or even quick enterprise surveys) than income from household enterprises and self‐employment. Wages are also likely to be reasonably correlated with broader measures of labor income, particularly in the industry sector where most of the labor market impact is expected.

The same set of indicators is likely to be useful for tracking short‐term poverty trends in Bangladesh even if there were no crisis. Monitoring short‐term changes in poverty and distribution, however, becomes especially important during an economic shock or a crisis when rapid changes in welfare are possible in a short timeframe that one would not expect in a “normal” year. The indicators suggested here can be useful in predicting such changes when a crisis hits, as well as the size of these impacts and how they are likely to be distributed in the population – given that real‐time data on household income or consumption to measure these impacts directly are usually unavailable.

_Secondly_ , our results indicate that just focusing on poverty numbers would provide a partial view of the distributional impact of the crisis in Bangladesh. The consumption/income impact is particularly significant for the top half of the distribution and becomes progressively higher further up the distribution. While public programs may not have much role to play to cushion the losses suffered by the upper half of the distribution, these losses may have important political economy implications. The prediction that the maximum impact in urban areas is likely to be on middle class households (50<sup>th</sup> to 80<sup>th</sup> percentiles of per capita consumption) may be particularly significant, since this group can have a strong influence on public perceptions about economic hardship.

_Thirdly_ , our results provide useful insights on the _types_ of households who are likely to be poor as a _direct_ result of the crisis. Such households are found to have characteristics somewhat different from those of the structurally poor, including a higher share of urban and non‐agricultural sector workers. This would imply that any intervention to mitigate the impact of the crisis on vulnerable households would need to be modified (or designed differently) from that of the traditional safety net programs.

A discussion of what kinds of public policies and programs are best suited to mitigate the impact of the crisis in Bangladesh is beyond the scope of this paper. A few broad statements can however be made based on our results and what is known about existing safety net programs. Given that safety net

> 30 Around 70% of the aggregate poverty impact is driven by slowdown in growth of external remittances; the impact of the crisis in 2010 would be lower (by almost a third of the projected impact) if food prices were to decline relative to other prices (Box 1).

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