Drought Shocks and Labor Reallocation in Rural Africa: Evidence from Ethiopia

Arnold L. Musungu, Zaneta Kubik and Matin Qaim

No 338675, Discussion Papers from University of Bonn, Center for Development Research (ZEF)

Abstract: We study how rural households in Ethiopia adapt to droughts through labor reallocation. By using three waves of panel data and exploiting spatial-temporal variations in drought exposure, we find that households reduce on-farm work and increase off-farm self-employment in response to both short-term and persistent droughts, without abandoning family farming. Diversification into off-farm activities is driven by drought-related productivity declines in agriculture and contributes to consumption smoothing. Households with better access to markets and financial services find it easier to reallocate labor off-farm. Our results highlight the importance of strengthening the rural non-farm economy to enhance rural households’ climate resilience.

Keywords: Labor; and; Human; Capital (search for similar items in EconPapers)
Pages: 38
Date: 2023-10-08
New Economics Papers: this item is included in nep-afr, nep-agr, nep-dev and nep-env
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:ubzefd:338675

DOI: 10.22004/ag.econ.338675

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