Weather Risk and the Off-Farm Labor Supply of Agricultural Households in India
AbstractAs one of the measures to smooth income, this paper focuses on the diversification of labor allocation across activities. A key feature of this paper is that it pays particular attention to differences in the covariance between weather risk and agricultural wages and between weather risk and nonagricultural wages. We estimate a multivariate tobit model of labor allocation using household data from rural areas of Bihar and Uttar Pradesh, India. The regression results show that the share of the offfarm labor supply increases with the weather risk, and the increase is much larger in the case of nonagricultural wage work than in the case of agricultural wage work. Simulation results based on the regression estimates show that the sectoral difference is substantial, implying that empirical and theoretical studies on farmers' labor supply response to risk should distinguish between the types of off-farm work involved.
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Bibliographic InfoPaper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25774.
Date of creation: 2006
Date of revision:
covariate risk; nonfarm employment; selfemployment; food security; India; Labor and Human Capital; Q12; O15; J22;
Find related papers by JEL classification:
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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