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Health, Enterprise, and Labor Complementarity in the Household

Achyuta Adhvaryu and Anant Nyshadham

Journal of Development Economics, 2017, vol. 126, issue C, 91-111

Abstract: We study the role of household enterprise as a coping mechanism after health shocks. Using variation in the cost of traveling to formal sector health facilities to predict recovery from acute illness in Tanzania, we show that individuals with prolonged illness switch from farm labor to enterprise activity. This response occurs along both the extensive (entry) and intensive (capital stock and labor supply) margins. Family members who are not ill exhibit exactly the same pattern of responses. Deriving a simple extension to the canonical agricultural household model, we show that our results suggest complementarities in household labor.

Keywords: Enterprise; Health shocks; Intra-household allocation; Labor supply (search for similar items in EconPapers)
JEL-codes: I15 J22 L26 O12 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:deveco:v:126:y:2017:i:c:p:91-111