Climate Variability, Shocks and Non-farm Employment: Evidence from Rural Households in Northeast Thailand

Mulubrhan Amare and Herman Waibel

No 187571, 54th Annual Conference, Goettingen, Germany, September 17-19, 2014 from German Association of Agricultural Economists (GEWISOLA)

Abstract: This paper examines the impact of climate variability and shocks on non-farm employment in rural areas of Northeast Thailand. The paper utilizes a large panel data set that includes detailed and retrospective information about shock experience and a corresponding twenty-year historical village-level monthly rainfall data set from rural Northeast Thailand. The paper finds that the labor market is heterogeneous in terms of adapting to climate variability and coping with shocks. Households use non-agricultural wage and self-employment as a means of adapting to rainfall variability while they use agricultural wage to cope with agricultural and demographic shocks. We also show that there is a concave relationship between rainfall variability and both non-agricultural wage and non-farm self-employment. Economic slowdown and idiosyncratic shocks, such as demographic shocks, lead to substantial non-agricultural wage employment reduction. Overall, our findings show that the labor market can be less effective as a means for adapting to severe rainfall variability, economic and demographic shocks. It is also observed that poorer households are less able to exploit the high returns of the labor market to cope with shocks because of a lack of start-up assets.

Keywords: Environmental Economics and Policy; International Development (search for similar items in EconPapers)
Pages: 24
Date: 2014
New Economics Papers: this item is included in nep-agr, nep-dev, nep-env and nep-sea
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:gewi14:187571

DOI: 10.22004/ag.econ.187571

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