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Is life more risky in the open? Household risk-coping and the opening of China's labor markets

  • Giles, John

This paper looks at the effect of access to off-farm employment opportunities on household exposure to unexpected shocks originating in the agricultural economy. Farm households with improved access to both migrant and local labor markets are better able to cope with shocks to agricultural production. The risk-coping benefits of improved access to off-farm markets are not shared evenly within or across villages. Wealthier households show a more pronounced reduction in exposure to shocks, including less variable income and consumption, and a reduced impact of production shocks on expenditures related to the education of children.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 81 (2006)
Issue (Month): 1 (October)
Pages: 25-60

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Handle: RePEc:eee:deveco:v:81:y:2006:i:1:p:25-60
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  1. Udry, Christopher, 1995. "Risk and Saving in Northern Nigeria," American Economic Review, American Economic Association, vol. 85(5), pages 1287-1300, December.
  2. Robert M. Townsend, . "Risk and Insurance in Village India," University of Chicago - Population Research Center 91-3a, Chicago - Population Research Center.
  3. Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Harvard Institute of Economic Research Working Papers 1727, Harvard - Institute of Economic Research.
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  5. McMillan, John & Whalley, John & Zhu, Lijing, 1989. "The Impact of China's Economic Reforms on Agricultural Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 781-807, August.
  6. Udry, Christopher, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 495-526, July.
  7. Jyotsna Jalan & Martin Ravallion, 1998. "Geographic Poverty Traps?," Boston University - Institute for Economic Development 86, Boston University, Institute for Economic Development.
  8. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
  9. Anjini Kochar, 1999. "Smoothing Consumption by Smoothing Income: Hours-of-Work Responses to Idiosyncratic Agricultural Shocks in Rural India," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 50-61, February.
  10. Xuejin Zuo & Feng Wang, 1999. "Inside China's Cities: Institutional Barriers and Opportunities for Urban Migrants," American Economic Review, American Economic Association, vol. 89(2), pages 276-280, May.
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