Department of Economics
University of Zambia
NBER Working Papers and Publications
|June 2014||Seasonal Credit Constraints and Agricultural Labor Supply: Evidence from Zambia|
with Günther Fink, B. Kelsey Jack: w20218
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-...