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Drought Shocks and Labor Reallocation in Rural Africa: Evidence from Ethiopia

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  • Musungu, Arnold L.
  • Kubik, Zaneta
  • Qaim, Matin

Abstract

We study how rural households in Ethiopia adapt to droughts through labor reallocation. By using three waves of panel data and exploiting spatial-temporal variations in drought exposure, we find that households reduce on-farm work and increase off-farm self-employment in response to both short-term and persistent droughts, without abandoning family farming. Diversification into off-farm activities is driven by drought-related productivity declines in agriculture and contributes to consumption smoothing. Households with better access to markets and financial services find it easier to reallocate labor off-farm. Our results highlight the importance of strengthening the rural non-farm economy to enhance rural households’ climate resilience.

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  • Musungu, Arnold L. & Kubik, Zaneta & Qaim, Matin, "undated". "Drought Shocks and Labor Reallocation in Rural Africa: Evidence from Ethiopia," Discussion Papers 338675, University of Bonn, Center for Development Research (ZEF).
    • Handle: RePEc:ags:ubzefd:338675
    DOI: 10.22004/ag.econ.338675
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    Cited by:

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    3. Chrispinus Mutsami & Martin C. Parlasca & Matin Qaim, 2025. "Evolving Farm and Off‐Farm Income Sources and Jobs in Rural Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 37(6), pages 1367-1380, August.
    4. Abay, Kibrom A. & Wondale, Meseret & Korir, Josphat K. & Bachewe, Fantu Nisrane & Araya, Mesele & Breisinger, Clemens, 2025. "The landscape of youth engagement in labor markets in Africa: Are youth driving structural transformation?," GSSP working papers 2382, International Food Policy Research Institute (IFPRI).
    5. Pieper, Theresa & Nguyen, Thanh-Tung & Qaim, Matin, 2025. "Access to electricity and gendered labor allocation: Insights from Ethiopia," Energy Policy, Elsevier, vol. 207(C).
    6. Homma, Kirara & Md. Saiful Islam, Abu Hayat & Matsuura-Kannari, Masanori & Debela, Bethelhem Legesse, 2025. "Weather shocks and child nutritional status in rural Bangladesh: Does labor allocation have a role to play?," Food Policy, Elsevier, vol. 135(C).
    7. Kelvin Mashisia Shikuku & Ibrahim Ochenje, 2025. "Impact of index insurance on downside income risk: Evidence from northern Kenya," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 47(2), pages 863-891, May.
    8. Alem, Yonas & Woldemichael, Leulseged L., 2025. "The Causal Effect of Drought on Energy Poverty: Evidence from Panel Data," EfD Discussion Paper 25-14, Environment for Development, University of Gothenburg.
    9. Yitayal Addis Alemayehu & Adnan Sirage Ali & Gebrie Tsegaye Mersha & Tsedey Tesfahun & Bewketu Mamaru Mengiste, 2025. "Extreme weather impacts on the socio-economic conditions of rural communities in Ethiopia: practical implications and recommendations for resilience and sustainability," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 13(1), pages 1-30, December.

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