Seasonal Credit Constraints and Agricultural Labor Supply
Seasonal Credit Constraints and Agricultural Labor Supply

Author: Günther Fink

Publisher:

Published: 2014

Total Pages: 43

ISBN-13:

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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.

Seasonal Liquidity, Rural Labor Markets and Agricultural Production
Seasonal Liquidity, Rural Labor Markets and Agricultural Production

Author: Günther Fink

Publisher:

Published: 2018

Total Pages: 0

ISBN-13:

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Many rural households in low and middle income countries continue to rely on small-scale agriculture as their primary source of income. In the absence of irrigation, income arrives only once or twice per year, and has to cover consumption and input needs until the subsequent harvest. We develop a model to show that seasonal liquidity constraints not only undermine households' ability to smooth consumption over the cropping cycle, but also affect labor markets if liquidity-constrained farmers sell family labor off-farm to meet short-run cash needs. To identify the impact of seasonal constraints on labor allocation and agricultural production, we conducted a two-year randomized controlled trial with small-scale farmers in rural Zambia. Our results indicate that lowering the cost of accessing liquidity at the time of the year when farmers are most constrained (the lean season) reduces aggregate labor supply, drives up wages and leads to a reallocation of labor from less to more liquidity-constrained farms. This reallocation reduces consumption and income inequality among treated farmers and increases average agricultural output.

Seasonal Liquidity, Rural Labor Markets and Agricultural Production
Seasonal Liquidity, Rural Labor Markets and Agricultural Production

Author: Günther Fink

Publisher:

Published: 2018

Total Pages: 51

ISBN-13:

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Many rural households in low and middle income countries continue to rely on small-scale agriculture as their primary source of income. In the absence of irrigation, income arrives only once or twice per year, and has to cover consumption and input needs until the subsequent harvest. We develop a model to show that seasonal liquidity constraints not only undermine households' ability to smooth consumption over the cropping cycle, but also affect labor markets if liquidity-constrained farmers sell family labor off-farm to meet short-run cash needs. To identify the impact of seasonal constraints on labor allocation and agricultural production, we conducted a two-year randomized controlled trial with small-scale farmers in rural Zambia. Our results indicate that lowering the cost of accessing liquidity at the time of the year when farmers are most constrained (the lean season) reduces aggregate labor supply, drives up wages and leads to a reallocation of labor from less to more liquidity-constrained farms. This reallocation reduces consumption and income inequality among treated farmers and increases average agricultural output.

Credit Constraints and Labor Supply
Credit Constraints and Labor Supply

Author: Kien Bui Trung Dao

Publisher:

Published: 2016

Total Pages: 45

ISBN-13:

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This paper examines labor supply adjustment - both at the intensive (hours worked) and extensive (labor force participation) margins - following financial market development. Theoretically, well-functioning credit markets allow individuals to transfer resources and substitute leisure across states. Hence, individuals would behave (w.r.t. labor supply) differently under complete and incomplete credit markets. We exploit the staggered passage of bank branching deregulation in the U.S. to study the impact of relaxing credit constraints on labor supply decisions. The intensity of labor supply, on average, is about 0.3 hours lower after the reform (and about 0.5 hours lower after five years following deregulation). We also find deregulation's impact heterogeneity across income distribution and demographics. The effect of lifting branching prohibitions is most pronounced for the lower-middle income (marginal) group. Further, these findings indicate that blacks were facing higher effective loan prices than whites, suggesting the existence of both statistical and taste-based discriminations. In contrast, we find little to no evidence that deregulation has a significant impact on the extensive margin of participation.

Agricultural Household Models
Agricultural Household Models

Author: Inderjit Singh

Publisher:

Published: 1986

Total Pages: 360

ISBN-13:

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This book presents the basic model of an agricultural household that underlies most of the case studies undertaken so far. The model assumes that households are price-takers and is therefore recursive. The decisions modeled include those affecting production and the demand for inputs and those affecting consumption and the supply of labor. Comparative results on selected elasticities are presented for a number of economies. The empirical significance of the approach is demonstrated in a comparison of models that treat production and consumption decisions separately and those in which the decisionmaking process is recursive. The book summarizes the implications of agricultural pricing policy for the welfare of farm households, marketed surplus, the demand for nonagricultural goods and services, the rural labor market, budget revenues, and foreign exchange earnings. In addition, it is shown that the basic model can be extended in order to explore the effects of government policy on crop composition, nutritional status, health, saving, and investment and to provide a more comprehensive analysis of the effects on budget revenues and foreign exchange earnings. Methodological topics, primarily the data requirements of the basic model and its extensions, along with aggregation, market interaction, uncertainty, and market imperfections are discussed. The most important methodological issues - the question of the recursive property of these models - is also discussed.

Labour Markets in Low-Income Countries
Labour Markets in Low-Income Countries

Author: David Lam

Publisher: Oxford University Press

Published: 2021-12-09

Total Pages: 257

ISBN-13: 0192897101

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"Employment and job creation are key components in achieving economic growth and sustainable development, particularly in low-income countries. The growing size of the working-age population in many developing regions underscores the need to further strengthen labour market structures in the world's poorest countries. Despite the importance of studying emerging labour markets, and investigating which policies are more successful, the evidence is rather limited. Against this backdrop, the joint IZA/FCDO Growth and Labour Markets in Low Income Countries (GLM|LIC) programme was established and has taken important steps to close this gap. Covering topics such as poverty, informality and rural labour, skills training and behaviour, gender inequality, youth and child labour, and migration, this volume presents key takeaways from most recent research in the field. Which development policies will work, which strategies will fail? The authors provide an in-depth discussion of current development programmes, based on the results of new evaluation studies, and derive important policy lessons"--Publisher's description.

Harvesting Prosperity
Harvesting Prosperity

Author: Keith Fuglie

Publisher: World Bank Publications

Published: 2020

Total Pages: 0

ISBN-13: 9781464813931

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This book documents frontier knowledge on the drivers of agriculture productivity to derive pragmatic policy advice for governments and development partners on reducing poverty and boosting shared prosperity. The analysis describes global trends and long-term sources of total factor productivity growth, along with broad trends in partial factor productivity for land and labor, revisiting the question of scale economies in farming. Technology is central to growth in agricultural productivity, yet across many parts of the developing world, readily available technology is never taken up. We investigate demand-side constraints of the technology equation to analyze factors that might influence producers, particularly poor producers, to adopt modern technology. Agriculture and food systems are rapidly transforming, characterized by shifting food preferences, the rise and growing sophistication of value chains, the increasing globalization of agriculture, and the expanding role of the public and private sectors in bringing about efficient and more rapid productivity growth. In light of this transformation, the analysis focuses on the supply side of the technology equation, exploring how the enabling environment and regulations related to trade and intellectual property rights stimulate Research and Development to raise productivity. The book also discusses emerging developments in modern value chains that contribute to rising productivity. This book is the fourth volume of the World Bank Productivity Project, which seeks to bring frontier thinking on the measurement and determinants of productivity to global policy makers.

Cash Transfers for Inclusive Societies
Cash Transfers for Inclusive Societies

Author: Jiaying Zhao

Publisher: University of Toronto Press

Published: 2023-10-10

Total Pages: 219

ISBN-13: 1487549474

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The latest title in the Behaviourally Informed Organizations series offers practical advice on how best to successfully design, deliver, and evaluate efficient cash transfer programs, with a view to alleviating poverty. While much progress has been made in reducing poverty worldwide – especially in the pre-pandemic era – it is fair to say that an unacceptably large proportion of the world’s people still live in poverty. Cash Transfers for Inclusive Societies sheds light on the widely prevalent cash transfer programs. The book asks these central questions: What is the state of the art in the development of welfare programs? What do we know works in these programs and what does not? How can an understanding of behavioral science better inform the design, delivery, and evaluation of welfare programs? The latest title in the Behaviourally Informed Organizations series, the book develops a nuanced framework for how governments, practitioners, and society in general should design cash transfer programs to improve inclusivity, reduce poverty, and improve equality. It draws on field experiments and case studies to showcase past successes, while also building frameworks and developing prescriptive advice that we can give to practitioners who are looking to design a behaviorally informed cash transfer program. With contributions from leading academics as well as seasoned practitioners, Cash Transfers for Inclusive Societies presents a new model to policymakers to study and shift the discourse on poverty alleviation from purely economic factors to also behavioral ones.