Have you ever seen the rain? Effect of rainfall shocks on male agricultural wages in India

Roshan Saha, Sunjae Won and Mykel R. Taylor

No 360941, 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO from Agricultural and Applied Economics Association

Abstract: Rainfall significantly influences agricultural productivity and labor markets in India. Deviations from ‘normal’ rainfall patterns impact economic outcomes by altering labor supply and wage dynamics. This paper uses two definitions to examine the effects of rainfall shocks on male agricultural wages. First, we classify positive (negative) shocks as deviations above (below) the 80th (20th) percentiles of the historical district-month rainfall distribution (1990–2017). Second, we redefine shocks using the previous 3-year moving reference period to minimize forward-looking bias. Using panel fixed-effects models on district-level data from 586 districts across 20 states, we find that rainfall shocks affect wages asymmetrically. Negative rainfall shocks in harvest season increase male real wages, while positive shocks have mixed effects depending on intensity and timing. But these individual season shocks are not significant when we consider the 3-year recall period. Rather, a negative shock in the sowing season followed by either positive or negative shock in the harvest season, together, influences male wages at the district level. The study underscores the importance of considering the reference period used to define rainfall shocks.

Keywords: Consumer/Household Economics; Labor and Human Capital (search for similar items in EconPapers)
Pages: 29
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea25:360941

DOI: 10.22004/ag.econ.360941

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