As 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 offÂfarm 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-Âfarm work involved.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)