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Rural Labor Market Responses to Large Lumpy Cash Transfers: Evidence from Malawi

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Abstract

We examine the impact of a lumpy agriculture-framed cash transfer on the day labor (ganyu) market using both spatial variation in the organization of households into farmer clubs and experimentally induced variation in transfers. In villages receiving larger cash disbursements, wages for agriculture day labor marginally increase, and overall employment falls. The employment results obscure important differential responses by transfer recipient (day labor supply falls) and non-recipient households (day labor supply increases). The village level wage impacts are driven by large, direct impacts of the transfer program on the demand for day labor and a reallocation of labor away from off-farm labor supply.

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  • Kate Ambler & Alan de Brauw & Susan Godlonton, 2018. "Rural Labor Market Responses to Large Lumpy Cash Transfers: Evidence from Malawi," Department of Economics Working Papers 2018-11, Department of Economics, Williams College.
    • Handle: RePEc:wil:wileco:2018-11
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