NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Seasonal Credit Constraints and Agricultural Labor Supply: Evidence from Zambia

Günther Fink, B. Kelsey Jack, Felix Masiye

NBER Working Paper No. 20218
Issued in June 2014
NBER Program(s):   DEV   LS

Small-scale farming remains the primary source of income for a majority of the population in developing countries. While most farmers primarily work on their own fields, off-farm labor is common among small-scale farmers. A growing literature suggests that off-farm labor is not the result of optimal labor allocation, but is instead driven by households' inability to cover short-term consumption needs with savings or credit. We conduct a field experiment in rural Zambia to investigate the relationship between credit availability and rural labor supply. We find that providing households with access to credit during the growing season substantially alters the allocation of household labor, with households in villages randomly selected for a loan program selling on average 25 percent less off-farm labor. We also find that increased credit availability is associated with higher consumption and increases in local farming wages. Our results suggest that a substantial fraction of rural labor supply is driven by short-term constraints, and that access to credit markets may improve the efficiency of labor allocation overall.

download in pdf format
   (820 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w20218

Users who downloaded this paper also downloaded* these:
Beaman, Karlan, Thuysbaert, and Udry w20387 Self-Selection into Credit Markets: Evidence from Agriculture in Mali
Crepon, Devoto, Duflo, and Pariente w20144 Estimating the Impact of Microcredit on Those Who Take It Up: Evidence from a Randomized Experiment in Morocco
LaFave and Thomas w20699 Farms, Families, and Markets: New Evidence on Completeness of Markets in Agricultural Settings
La Porta and Shleifer w20205 Informality and Development
Mobarak and Rosenzweig w19811 Risk, Insurance and Wages in General Equilibrium
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us