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The Labor Market as a Smoothing Device: Labor Supply Responses to Crop Loss

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  • Lisa A. Cameron
  • Christopher Worswick

Abstract

The paper studies the way in which labor supply responses enable households to smooth consumption in the face of crop loss. The 1993 Indonesian Family Life Survey is unusual because it contains self-reported information on crop loss and on household responses to crop loss. Of those households that report a crop loss, 41.6% also report that they responded by taking an extra job. Using these self-reported measures, the authors find evidence which suggests that the income associated with this shock-induced labor supply is important in allowing the household to avoid reducing consumption expenditure. Household members, however, do not seem to increase their total hours of work. They appear to just reallocate their time from household farming to other labor market activities. Copyright Blackwell Publishing Ltd 2003.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 7 (2003)
Issue (Month): 2 (05)
Pages: 327-341

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Handle: RePEc:bla:rdevec:v:7:y:2003:i:2:p:327-341

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Cited by:
  1. Mueller, Valerie & Quisumbing, Agnes, 2010. "Short- and long-term effects of the 1998 Bangladesh flood on rural wages," IFPRI discussion papers 956, International Food Policy Research Institute (IFPRI).
  2. Costas Meghir & Luigi Pistaferri, 2010. "Earnings, Consumption and Lifecycle Choices," NBER Working Papers 15914, National Bureau of Economic Research, Inc.
  3. Raj Chetty & Adam Looney, 2005. "Income Risk and the Benefits of Social Insurance: Evidence from Indonesia and the United States," NBER Working Papers 11708, National Bureau of Economic Research, Inc.
  4. Michael Grimm, 2006. "Mortality and Survivors' Consumption," Discussion Papers of DIW Berlin 611, DIW Berlin, German Institute for Economic Research.
  5. Gabriella Berloffa & Francesca Modena, 2009. "Income Shocks, Coping Strategies, and Consumption Smoothing. An Application to Indonesian Data," Department of Economics Working Papers 0901, Department of Economics, University of Trento, Italia.
  6. Jungho Kim & Alexia Prskawetz, 2010. "External Shocks, Household Consumption and Fertility in Indonesia," Population Research and Policy Review, Springer, vol. 29(4), pages 503-526, August.
  7. Ana María Ibáñez L. & Manuel Fernández & Ximena Peña, 2011. "Adjusting the Labor Supply to Mitigate Violent Shocks: Evidence from Rural Colombia," DOCUMENTOS CEDE 009246, UNIVERSIDAD DE LOS ANDES-CEDE.
  8. Chetty, Raj & Looney, Adam, 2006. "Consumption smoothing and the welfare consequences of social insurance in developing economies," Journal of Public Economics, Elsevier, vol. 90(12), pages 2351-2356, December.
  9. Ito, Takahiro & Kurosaki, Takashi, 2006. "Weather Risk and the Off-­Farm Labor Supply of Agricultural Households in India," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25774, International Association of Agricultural Economists.
  10. World Bank, 2006. "Making the New Indonesia Work for the Poor," World Bank Other Operational Studies 8172, The World Bank.
  11. Yoshito Takasaki & Bradford L. Barham & Oliver T. Coomes, 2010. "Smoothing Income against Crop Flood Losses in Amazonia: Rain Forest or Rivers as a Safety Net?," Review of Development Economics, Wiley Blackwell, vol. 14(1), pages 48-63, 02.
  12. Jeremy D. Foltz & Ousman Gajigo, 2012. "Assessing the Returns to Education in The Gambia-super- †," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 21(4), pages 580-608, August.
  13. Jeremy D. Foltz & Ousman Gajigo, 2012. "Working Paper 145 - Assessing the Returns to Education in the Gambia," Working Paper Series 376, African Development Bank.

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