Seasonal Credit Constraints and Agricultural Labor Supply: Evidence from Zambia
Small-scale farming remains the primary source of income for a majority of the population in developing countries. While most farmers primarily work on their own fields, off-farm labor is common among small-scale farmers. A growing literature suggests that off-farm labor is not the result of optimal labor allocation, but is instead driven by households' inability to cover short-term consumption needs with savings or credit. We conduct a field experiment in rural Zambia to investigate the relationship between credit availability and rural labor supply. We find that providing households with access to credit during the growing season substantially alters the allocation of household labor, with households in villages randomly selected for a loan program selling on average 25 percent less off-farm labor. We also find that increased credit availability is associated with higher consumption and increases in local farming wages. Our results suggest that a substantial fraction of rural labor supply is driven by short-term constraints, and that access to credit markets may improve the efficiency of labor allocation overall.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Date of creation:||Jun 2014|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
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.:
- Rose, Elaina, 2001. "Ex ante and ex post labor supply response to risk in a low-income area," Journal of Development Economics, Elsevier, vol. 64(2), pages 371-388, April.
- Fafchamps, Marcel, 1993. "Sequential Labor Decisions under Uncertainty: An Estimable Household Model of West-African Farmers," Econometrica, Econometric Society, vol. 61(5), pages 1173-97, September.
- Behrman, Jere R. & Foster, Andrew D. & Rosenzweig, Mark R., 1997.
"The dynamics of agricultural production and the calorie-income relationship: Evidence from Pakistan,"
Journal of Econometrics,
Elsevier, vol. 77(1), pages 187-207, March.
- Jere Behrman & Mark Rosenzweig & Andrew D. Foster, . "The Dynamics of Agricultural Production and the Calorie-Income Relationship: Evidence from Pakistan," Home Pages _069, University of Pennsylvania.
- Strauss, John, 1986. "Does Better Nutrition Raise Farm Productivity?," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 297-320, April.
- Paxson, C.H., 1991.
"Consumption And Income Seasonality In Thailand,"
150, Princeton, Woodrow Wilson School - Development Studies.
- Pitt, Mark M & Rosenzweig, Mark R & Hassan, Md Nazmul, 1990.
"Productivity, Health, and Inequality in the Intrahousehold Distribution of Food in Low-Income Countries,"
American Economic Review,
American Economic Association, vol. 80(5), pages 1139-56, December.
- Pitt, Mark M. & Rosenzweig, Mark R. & Hassan, Md. Nazmul, 1989. "Productivity, Health and Inequality in the Intrahousehold Distribution of Food in Low-Income Countries," Bulletins 7480, University of Minnesota, Economic Development Center.
- Basu, Karna & Wong, Maisy, 2012. "Evaluating Seasonal Food Security Programs in East Indonesia," MPRA Paper 51219, University Library of Munich, Germany.
- Subramanian, Shankar & Deaton, Angus, 1996.
"The Demand for Food and Calories,"
Journal of Political Economy,
University of Chicago Press, vol. 104(1), pages 133-62, February.
- Jonathan Morduch, 1995.
"Income Smoothing and Consumption Smoothing,"
Journal of Economic Perspectives,
American Economic Association, vol. 9(3), pages 103-114, Summer.
- Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Harvard Institute of Economic Research Working Papers 1727, Harvard - Institute of Economic Research.
- Morduch, J., 1995. "Income Smoothing and Consumption Smoothing," Papers 512, Harvard - Institute for International Development.
- Ahmed Mushfiq Mobarak & Mark Rosenzweig, 2014.
"Risk, Insurance and Wages in General Equilibrium,"
NBER Working Papers
19811, National Bureau of Economic Research, Inc.
- Mobarak, Ahmed Mushfiq & Rosenzweig, Mark, 2014. "Risk, Insurance and Wages in General Equilibrium," CEPR Discussion Papers 9797, C.E.P.R. Discussion Papers.
- Mark Rosenzweig & Ahmed Musfiq Mobarak, 2013. "Risk, Insurance and Wages in General Equilibrium," Working Papers 1035, Economic Growth Center, Yale University.
- Jacob Ricker-Gilbert & Nicole M. Mason & Francis A. Darko & Solomon T. Tembo, 2013. "What are the effects of input subsidy programs on maize prices? Evidence from Malawi and Zambia," Agricultural Economics, International Association of Agricultural Economists, vol. 44(6), pages 671-686, November.
- Dimowa, Ralitza & Michaelowa, Katharina & Weber, Anke, 2010. "Ganyu Labour in Malawi: Understanding Rural Households’ Labour Supply Strategies," Proceedings of the German Development Economics Conference, Hannover 2010 29, Verein für Socialpolitik, Research Committee Development Economics.
- Kochar, Anjini, 1995. "Explaining Household Vulnerability to Idiosyncratic Income Shocks," American Economic Review, American Economic Association, vol. 85(2), pages 159-64, May.
- Raymond P. Guiteras & B. Kelsey Jack, 2014. "Incentives, Selection and Productivity in Labor Markets: Evidence from Rural Malawi," NBER Working Papers 19825, National Bureau of Economic Research, Inc.
- Takahiro Ito & Takashi Kurosaki, 2007.
"Weather Risk, Wages in Kind, and the Off-Farm Labor Supply of Agricultural Households in a Developing Country,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 91(3), pages 697-710.
- Takahiro Ito & Takashi Kurosaki, 2007. "Weather Risk, Wages in Kind, and the Off-Farm Labor Supply of Agricultural Households in a Developing Country," Hi-Stat Discussion Paper Series d07-226, Institute of Economic Research, Hitotsubashi University.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:20218. 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: ()
If references are entirely missing, you can add them using this form.