Families, Insurance and Employment in Developing Agricultural Economies

Pascal St-Amour and Désiré Vencatachellum ()

Cahiers de recherche from Université Laval - Département d'économique

Abstract: This paper studies the impact of families on sectoral labor allocation in developing agricultural economies. In an overlapping generations framework, we equate a family to a contingent-claims contract. Families are endogenous by design. A risk-averse adult facing possible unemployment may be insured by a less risk-averse elder. Similarly, a risk-averse elder may purchase crop failure insurance from a less risk-averse adult. The family is the unique provider of insurance services yielding positive expected insurance rent. A monopsonist landlord extracts this expected rent through state-contingent tenancy contracts. When unemployment insurance contracts are expensive to enforce, families do not exist if the adult is weakly risk-averse and unemployment risk is too high or too low This `family switching' property is internalized by the landlord, such that family organization alters the relative price of unskilled laborers, paid a fixed wage, and skilled sharecroppers to whom contingent tenancy contracts are offered. Our results indicate that families affect total employment and can yield multiple steady- state equilibria.

Keywords: Employment; Family; Insurance; Inter-Generational Transfers; Intra-Household Transfers; Sharecropping. (search for similar items in EconPapers)
JEL-codes: O13 O15 O17 (search for similar items in EconPapers)
Date: 1997
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.ecn.ulaval.ca/w3/recherche/cahiers/1997/9703.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lvl:laeccr:9703

Access Statistics for this paper

More papers in Cahiers de recherche from Université Laval - Département d'économique Contact information at EDIRC.
Bibliographic data for series maintained by Manuel Paradis ().