Does Off-Farm Labor Relax Farmers’ Credit Constraints? Evidence from Longitudinal Data for Vietnam
We examine the relationship between participation in non-agricultural labor activities and farming production decisions, focusing on the use of inputs. In particular, we are interested in the hypothesis that income from non-agricultural labor relaxes credit constraints. Using longitudinal data for Vietnam from 1993-98, we find that households participating in non-agricultural labor activities, consistently with our hypothesis, spend significantly more on seeds, services, hired labor and livestock inputs.
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