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Health, Enterprise, and Labor Complementarity in the Household

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  • Adhvaryu, Achyuta
  • Nyshadham, Anant

Abstract

We study the role of household enterprise as a coping mechanism after health shocks. Using variation in the cost of traveling to formal sector health facilities to predict recovery from acute illness in Tanzania, we show that individuals with prolonged illness switch from farm labor to enterprise activity. This response occurs along both the extensive (entry) and intensive (capital stock and labor supply) margins. Family members who are not ill exhibit exactly the same pattern of responses. Deriving a simple extension to the canonical agricultural household model, we show that our results suggest complementarities in household labor.

Suggested Citation

  • Adhvaryu, Achyuta & Nyshadham, Anant, 2017. "Health, Enterprise, and Labor Complementarity in the Household," Journal of Development Economics, Elsevier, vol. 126(C), pages 91-111.
  • Handle: RePEc:eee:deveco:v:126:y:2017:i:c:p:91-111
    DOI: 10.1016/j.jdeveco.2016.11.007
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    Cited by:

    1. Axel Demenet, 2016. "Health Shocks and Permanent Income Loss: the Household Business Channel," Working Papers DT/2016/11, DIAL (Développement, Institutions et Mondialisation).

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    More about this item

    Keywords

    Enterprise; Health shocks; Intra-household allocation; Labor supply;
    All these keywords.

    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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