Rainfall Forecasts, Weather and Wages over the Agricultural Production Cycle
AbstractWe look at the effects of rainfall forecasts and realized rainfall on equilibrium agricultural wages over the course of the agricultural production cycle. We show theoretically that a forecast of good weather can lower wages in the planting stage, by lowering ex ante out-migration, and can exacerbate the negative impact of adverse weather on harvest-stage wages. Using Indian household panel data describing early-season migration and district-level planting- and harveststage wages over the period 2005-2010, we find results consistent with the model, indicating that rainfall forecasts improve labor allocations on average but exacerbate wage volatility because they are imperfect.
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Bibliographic InfoPaper provided by Economic Growth Center, Yale University in its series Working Papers with number 1036.
Length: 14 pages
Date of creation: Jan 2014
Date of revision:
wages; forecasting; migration;
Other versions of this item:
- Mark R. Rosenzweig & Christopher Udry, 2014. "Rainfall Forecasts, Weather and Wages over the Agricultural Production Cycle," NBER Working Papers 19808, National Bureau of Economic Research, Inc.
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
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