Labor Supply Responses to Adverse Shocks under Credit Constraints: Evidence from Bukidnon, Philippines
The ability of households to insure consumption from adverse shocks is an important aspect of vulnerability to poverty. How is consumption insurance achieved in a low-income setting where formal credit and insurance markets have been observed to be imperfect or missing? Using 2003 data from the Philippine province of Bukidnon, we investigate how labor supply is used to buffer transitory income shocks, in light of credit constraints. We find that the most vulnerable households are those with little education and with few or no able-bodied male members. Appropriate policy responses include counter-cyclical workfare programs targeted to households with high female-to-male ratios, households with high dependency ratios, and households with little or no education, as well as the provision of universal education and health care. These programs are likely to be effective in strengthening the labor endowments of households and improving their ability to cope with adverse shocks in the future.
|Date of creation:||2006|
|Date of revision:|
|Contact details of provider:|| Postal: Pavillon J.A. De Seve, Québec, Québec, G1V 0A6|
Phone: 1-418-656-2131, ext. 2697
Web page: http://www.pep-net.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Carter, Michael R. & Zimmerman, Frederick J., 2000.
"The dynamic cost and persistence of asset inequality in an agrarian economy,"
Journal of Development Economics,
Elsevier, vol. 63(2), pages 265-302, December.
- MICHAEL R. CARTER & Frederic Zimmerman, 1998. "The Dynamic Cost and Persistence of Asset Inequality in an Agrarian Economy," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 416, Wisconsin-Madison Agricultural and Applied Economics Department.
- Deaton, A., 1989.
"Saving And Liquidity Constraints,"
153, Princeton, Woodrow Wilson School - Public and International Affairs.
- Hamish Low, 1999. "Self-insurance and unemployment benefit in a life-cycle model of labour supply and savings," IFS Working Papers W99/24, Institute for Fiscal Studies.
- James J. Heckman & Thomas E. Macurdy, 1980. "A Life Cycle Model of Female Labour Supply," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 47-74.
- Eswaran, Mukesh & Kotwal, Ashok, 1986. "Access to Capital and Agrarian Production Organisation," Economic Journal, Royal Economic Society, vol. 96(382), pages 482-98, June.
- Prieto-Rodríguez, Juan & Rodríguez-Gutiérrez, César, 2000. "Participation of Married Women in the Labour Market and the 'Added Worker Effect' in Europe," IRISS Working Paper Series 2000-12, IRISS at CEPS/INSTEAD.
- Courtney C. Coile, 2004. "Health Shocks and Couples' Labor Supply Decisions," NBER Working Papers 10810, National Bureau of Economic Research, Inc.
- Skoufias, Emmanuel & Quisumbing, Agnes R., 2003.
"Consumption insurance and vulnerability to poverty,"
155, International Food Policy Research Institute (IFPRI).
- Skoufias, Emmanuel & Quisumbing, Agnes R., 2003. "Consumption insurance and vulnerability to poverty," FCND discussion papers 155, International Food Policy Research Institute (IFPRI).
- Kochar, Anjini, 1995. "Explaining Household Vulnerability to Idiosyncratic Income Shocks," American Economic Review, American Economic Association, vol. 85(2), pages 159-64, May.
- Eric M. Engen & Jonathan Gruber, 1995. "Unemployment Insurance and Precautionary Saving," NBER Working Papers 5252, National Bureau of Economic Research, Inc.
- Rajeev Dehejia & Roberta Gatti, 2002. "Child Labor: The Role of Income Variability and Access to Credit Across Countries," NBER Working Papers 9018, National Bureau of Economic Research, Inc.
- Maloney, Tim, 1991. "Unobserved Variables and the Elusive Added Worker Effect," Economica, London School of Economics and Political Science, vol. 58(230), pages 173-87, May.
- Melvin Stephens, 2002.
"Worker Displacement and the Added Worker Effect,"
Journal of Labor Economics,
University of Chicago Press, vol. 20(3), pages 504-537, July.
- Lim, Joseph Y., 2000. "The Effects of the East Asian Crisis on the Employment of Women and Men: The Philippine Case," World Development, Elsevier, vol. 28(7), pages 1285-1306, July.
- Engen, Eric M. & Gruber, Jonathan, 2001. "Unemployment insurance and precautionary saving," Journal of Monetary Economics, Elsevier, vol. 47(3), pages 545-579, June.
- Morduch, J., 1995.
"Income Smoothing and Consumption Smoothing,"
512, Harvard - Institute for International Development.
- Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Harvard Institute of Economic Research Working Papers 1727, Harvard - Institute of Economic Research.
- Hanan G. Jacoby & Emmanuel Skoufias, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Oxford University Press, vol. 64(3), pages 311-335.
- Pieter Serneels, 2002.
"The added worked effect and intra household aspects of unemployment,"
CSAE Working Paper Series
2002-14, Centre for the Study of African Economies, University of Oxford.
- Pieter Serneels, 2004. "The Added Worker Effect and Intrahousehold Aspects of Unemployment," Development and Comp Systems 0409014, EconWPA.
- Pieter Serneels, 2002. "The Added Worker Effect and Intrahousehold Aspects of Unemployment," Economics Series Working Papers WPS/2002-14, University of Oxford, Department of Economics.
- Philip Merrigan & Michel Normandin, 1994.
"Precautionary Saving Motives: An Assessment from U.K. Time Series of Cross-Sections,"
Cahiers de recherche CREFE / CREFE Working Papers
29, CREFE, Université du Québec à Montréal.
- Merrigan, Philip & Normandin, Michel, 1996. "Precautionary Saving Motives: An Assessment from UK Time Series of Cross-Sections," Economic Journal, Royal Economic Society, vol. 106(438), pages 1193-1208, September.
- Cochrane, John H, 1991. "A Simple Test of Consumption Insurance," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 957-76, October.
- Lundberg, Shelly, 1985. "The Added Worker Effect," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 11-37, January.
- Jonathan Gruber & Julie Berry Cullen, 1996. "Spousal Labor Supply as Insurance: Does Unemployment Insurance Crowd Outthe Added Worker Effect?," NBER Working Papers 5608, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:lvl:pmmacr:2006-15. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Manuel Paradis)
If references are entirely missing, you can add them using this form.