IDEAS home Printed from https://ideas.repec.org/p/ags/aaae07/52159.html

Rural Household Labour Demand, Contract Choice, Hoarding Cost and Poverty: Evidence from Western Kenya

Author

Listed:
  • Gathungu, E.
  • Musyoka, M.P.

Abstract

This study determines the factors that influenced contract choice, labour demand and examines the existence of labour hoarding practice in Western region of Kenya. Data from Egerton University’s Tegemeo Institute of Agricultural Policy and Development was used for the analysis.. A two step Heckman model was employed to estimate the extent of engagement in daily and semi-permanent contracts conditional on choice of contract. Results from the study show that casual and semi-permanent contracts are substitutes. Family labour negatively influences engagement in daily and semi-permanent contracts hence it is a substitute to the two forms of the contracts. Increase in wages paid to casual contracts is negative and significant to the extent of daily contract engagement but positive and significant to semi-permanent contracts supporting the substitutability of daily contracts for semi-permanent contracts. Methods and costs of farm preparation are significant in influencing the choice and demand for any type of contracts. The proxy variable for hoarding costs is significant and positive indicating that there are hoarding costs incurred in the maintaining a steady pool of labour within the farm. From the results the relatively asset poor farmers engage in the wage high daily contracts to avoid incurring hoarding costs as indicated by the dummy denoting poverty level. However, to avoid uncertainty during peak periods semi-permanent contracts are highly employed by the asset poor farmers. From the results, farmers willing to minimize hoarding costs may find themselves substituting family labour for daily contracts or in absence of family labour, semi-permanent contracts for daily contracts.

Suggested Citation

  • Gathungu, E. & Musyoka, M.P., 2008. "Rural Household Labour Demand, Contract Choice, Hoarding Cost and Poverty: Evidence from Western Kenya," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52159, African Association of Agricultural Economists (AAAE).
    • Handle: RePEc:ags:aaae07:52159
    DOI: 10.22004/ag.econ.52159
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/52159/files/Gathungu.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.52159?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    2. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    3. David Card, 1995. "The Wage Curve: A Review," Working Papers 722, Princeton University, Department of Economics, Industrial Relations Section..
    4. Pal, Sarmistha, 2002. "Segmentation of Rural Labour Contracts: Some Further Evidence," Bulletin of Economic Research, Wiley Blackwell, vol. 54(2), pages 151-180, April.
    5. David Card, 1995. "The Wage Curve: A Review," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 285-299, June.
    6. Pal, Sarmistha, 1999. "Task-Based Segmentation of Rural Labour Contracts: Theory and Evidence," Bulletin of Economic Research, Wiley Blackwell, vol. 51(1), pages 67-94, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Inmaculada Garcia-Mainar & Victor Montuenga-Gomez, 2003. "The Spanish Wage Curve: 1994-1996," Regional Studies, Taylor & Francis Journals, vol. 37(9), pages 929-945.
    2. David Castro Lugo, 2006. "Curva salarial: una aplicación para el caso de México, 1993-2002," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 21(2), pages 233-273.
    3. Herbert Brücker & Elke J. Jahn, 2011. "Migration and Wage‐setting: Reassessing the Labor Market Effects of Migration," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113, pages 286-317, June.
    4. Andrea Grabmayer & Andrea Hartmann & Maria Thalhammer, 2009. "Labour Mobility within the EU in the Context of Enlargement and the Functioning of the Transitional Arrangements," WIFO Studies, WIFO, number 35641, June.
    5. Jens Suedekum, 2005. "Increasing returns and spatial unemployment disparities," Papers in Regional Science, Wiley Blackwell, vol. 84(2), pages 159-181, June.
    6. Simonetta Longhi, 2012. "Job Competition and the Wage Curve," Regional Studies, Taylor & Francis Journals, vol. 46(5), pages 611-620, August.
    7. Peter Nijkamp & Jacques Poot, 2005. "The Last Word on the Wage Curve?," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 421-450, July.
    8. Reinhold Kosfeld & Christian Dreger, 2018. "Local and spatial cointegration in the wage curve – a spatial panel analysis for german regions," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 38(1), pages 53-75, February.
    9. Ilias Livanos, 2010. "The Wage-Local Unemployment Relationship in a Highly Regulated Labour Market: Greece," Regional Studies, Taylor & Francis Journals, vol. 44(4), pages 389-400.
    10. Joseph Persky & Daniel Felsenstein, 2008. "Job Chains And Wage Curves: Worker Mobility And Marshallian Surpluses In Evaluating Regional Employment Growth," Journal of Regional Science, Wiley Blackwell, vol. 48(5), pages 921-940, December.
    11. Patrick A. Puhani, 2000. "On the Identification of Relative Wage Rigidity Dynamics," William Davidson Institute Working Papers Series 343, William Davidson Institute at the University of Michigan.
    12. Wouter Vermeulen & J. van Ommeren, 2006. "Compensation of regional unemployment in housing markets," CPB Discussion Paper 57, CPB Netherlands Bureau for Economic Policy Analysis.
    13. Koenig, Felix & Manning, Alan & Petrongolo, Barbara, 2014. "Reservation wages and the wage flexibility puzzle," LSE Research Online Documents on Economics 60613, London School of Economics and Political Science, LSE Library.
    14. Baltagi, Badi H. & Rokicki, Bartlomiej, 2014. "The spatial Polish wage curve with gender effects: Evidence from the Polish Labor Survey," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 36-47.
    15. López Enciso, Enrique & Ramírez Giraldo, María Teresa (ed.), 2011. "Formación de precios y salarios en Colombia T.2," Books, Banco de la Republica de Colombia, volume 2, number 2011b-04, November.
    16. Francesco Devicienti, 2002. "Downward Nominal Wage Rigidity in Italy: Evidence and Consequences," LABORatorio R. Revelli Working Papers Series 20, LABORatorio R. Revelli, Centre for Employment Studies.
    17. International Monetary Fund, 2005. "Wage Flexibility in Turbulent Times: A Practitioner’s Guide, with an Application to Poland," IMF Working Papers 2005/134, International Monetary Fund.
    18. Robert A. Hart, 2003. "Overtime Working, The Phillips Curve And The Wage Curve: British Engineering, 1926–66," Manchester School, University of Manchester, vol. 71(2), pages 97-112, March.
    19. Marisa Carla Bucheli Anaya & Cecilia González Rodríguez-Villamil, 2012. "An estimation of the wage curve for Uruguay," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID.
    20. Hynninen, Sanna-Mari, 2009. "Is there a wage curve for the highly educated?," ISER Working Paper Series 2009-17, Institute for Social and Economic Research.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaae07:52159. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaaeaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.