Ex ante and ex post labor supply response to risk in a low-income area

Abstract

This paper tests for ex ante and ex post labor supply responses to weather risk for rural Indian farm households. The analysis uses panel data on 2115 households spanning 13 states in rural India, merged with a 22-year series of district-level rainfall data. Ex ante, households facing riskier distributions of rainfall are more likely to participate in the labor market. Ex post, unexpectedly bad weather and low rainfall increase labor force participation. © 2001 Published by Elsevier Science B.V.