Labor Allocation Decisions Research Articles

Household characteristics and common property forest use: complementarities and contradictions

Being limited in supply but accessible for community usage, sustainable management of Common pool resources is still an important question facing both development planners and the academia. Experience from community forestry program in Nepal, and elsewhere, has so far indicated that poorer households are still marginalized even if resources are managed under community ownership. In this paper, I seek to analyze the socio-economic attributes of households that determine labor allocation decisions for forest product collection activities. This will help better understand why poorer groups have not been benefited from the management of community forests. I will then highlight the need for more effective policy and institutional interventions that would help ensure efficient and equitable access to the local level natural resource base.

Long-Run Labor Costs of Housing Booms and Busts

Abstract We show large flows of workers into the real estate agent (REA) occupation during the early 2000s from virtually all parts of the skill, wage, and education spectrums. We find those entering REA in Metropolitan Statistical Areas (MSAs) with house price bubbles end up in occupations paying significantly less in the long-run as compared to similar REA entrants in non-bubble areas. Even in 2017, when house prices and employment return to their pre-crisis levels, REA entrants in Bubble MSAs are in occupations earning about 6% less. These results point to lasting effects of labor allocation decisions in response to distorted price signals.

Labour Allocation Decision of Rice Farming Households in Bangladesh

This paper investigates the factors affecting the labour allocation decisions of rice‐producing households in Bangladesh. A farm‐household model has been used to explore the household decision‐making mechanism. We use a primary questionnaire survey, and a Generalised Ordered Logit model is used to identify the factors affecting the sample households' likelihood of choosing different labour regimes, assuming hiring‐in is the top ordered alternative, followed by self‐cultivator and smallholders. Results show that one more year of schooling of the household head increases the likelihood of choosing the hiring‐in category against the lower‐ordered choices by 25 per cent. Having more cultivated land substantially improves the propensity of a household to hire labour versus selling labour or self‐cultivation (odds ratio 11.68). If a household lives a kilometre further from the Upazila headquarter, it is 11 per cent more likely to hire labour than being either a smallholder or self‐cultivator, which might be a result of the larger availability of labour in those areas. Additionally, an increase in the number of visits by agricultural extension officers reduces the household's likelihood of hiring labour by almost 21 per cent while making the households more likely to be self‐cultivators.

Determinants of Smallholder Farmer Labor Allocation Decisions in Uganda

ABSTRACT This study provides evidence on factors that influence household labor allocation decisions and demand for farm labor in Uganda. We estimated a monthly panel data to deal with potential heterogeneity or individual effect and tested for violation of the random effects modeling assumption that the explanatory variables are orthogonal to the unit effects. In addition, we estimated a random effects tobit model that involve explained variables with corner solutions. The results show that exogenous income did not affect off-farm labor supply by liquidity constrained households while liquidity unconstrained households increased the amount of labor supplied to off-farm activities and the amount of labor hired in. Farm size and education of household head improved labor productivity on farm and hence the amount of labor hired. Road proximity improved both the hiring in and out of labor. The household being male headed improved the work hours in the nonagricultural off-farm activities. The findings imply that direct payments such as input provision to the poor may not improve labor employment unless backed with policies that remove bottlenecks and improve opportunities in the labor market. Instead, investment in micro credit institutions, road infrastructure, and education suited to smallholder production needs and policies that improve gender balance in terms of access to productive resources could help alleviate bottlenecks in labor markets and improve resource allocation between farm and off-farm sectors.

Off-farm income and direct payments—an indispensable diversification strategy of Swiss farmers

Abstract Following the theory of a farm household model, the relations between farm and farmer characteristics, including two different kinds of direct payments, and their effects on the off-farm labour allocation decisions of farm operators were analysed. Swiss farm accountancy data network (FADN) data of the years 2017, 2018, and 2019 for the whole sample and two different income groups were used to model both off-farm labour participation and supply decisions. The results show that diversification into off-farm employment is a highly relevant strategy of Swiss farmers and that direct payments are a complementary income source. Above a certain level, biodiversity payments show a substitution effect, meaning that off-farm participation is reduced. Off-farm labour supply is related not to direct payments but to production type and technology, with dairy and organic farmers having spent fewer days engaging in off-farm employment. Education positively correlates to off-farm labour participation. Even though off-farm income and direct payments are an indispensable income source for Swiss farmers, income-related policy goals cannot be considered achieved in terms of either farm or household income. Whether public money would be better spent on education than on unprofitable farm businesses should be analysed in future studies.

Temperature and work:Time allocated to work under varying climate and labor market conditions.

Workers in climate exposed industries such as agriculture, construction, and manufacturing face increased health risks of working on high temperature days and may make decisions to reduce work on high-heat days to mitigate this risk. Utilizing the American Time Use Survey (ATUS) for the period 2003 through 2018 and historical weather data, we model the relationship between daily temperature and time allocation, focusing on hours worked by high-risk laborers. The results indicate that labor allocation decisions are context specific and likely driven by supply-side factors. We do not find a significant relationship between temperature and hours worked during the Great Recession (2008–2014), perhaps due to high competition for employment, however during periods of economic growth (2003–2007, 2015–2018) we find a significant reduction in hours worked on high-heat days. During periods of economic growth, for every degree above 90 on a particular day, the average high-risk worker reduces their time devoted to work by about 2.6 minutes relative to a 90-degree day. This effect is expected to intensify in the future as temperatures rise. Applying the modeled relationships to climate projections through the end of century, we find that annual lost wages resulting from decreased time spent working on days over 90 degrees across the United States range from $36.7 to $80.0 billion in 2090 under intermediate and high emission futures, respectively.

Money or Management? A Field Experiment on Constraints to Entrepreneurship in Rural Pakistan

This paper identifies the relative importance of human and physical capital for entrepreneurship. Microfinance clients were offered business training and a loan lottery of up to seven times the average loan size. Business training increased business knowledge, reduced business failure, improved business practices, and increased household expenditures by US$82 per year. It also improved financial and labor allocation decisions. These effects are concentrated among male clients, however. Access to larger loans, in contrast, had little effect, perhaps because current loan sizes already meet the demand of most clients. Despite these positive impacts, business training was not cost-effective for the lender.

Investigating the existence of entry barriers in rural non-farm sector (RNFS) employment in India: A theoretical modelling and an empirical analysis

Abstract Amidst the laggardness of the farm sector, a major shift away from the farm sector to the rural non-farm sector (RNFS) has been observed in India, in the recent decades. However, the diversification into the RNFS, especially for the small and the marginal farmers, may be restricted due to the presence of various entry barriers like, lack of education in general and technical education in particular, credit constraint and a lower endowment of social capital. In this context, the study develops a simple theoretical model to incorporate the labour allocation decisions of the rural farm households, focussing on the potential entry barriers in the RNFS. The theoretically determined entry barriers along with other covariates are then used to empirically estimate the intensity of RNFS participation. We employ household level panel data on Indian states belonging to Semi-arid tropics (SAT) and Eastern regions, for the years 2010–14. A fractional response model is used to empirically analyse the determinants underlying RNFS diversification. The empirical results of the study confirm the presence of entry barriers in the form of lack of education and technical education, and access to credit and social capital. Other variables that are found to have a significant impact on diversification are land asset, family size, gender of the household head, age of the household head and farm income. Since, access to education, skill, credit and social capital are vital factors determining RNFS diversification, specific policies are required to be implemented for increasing access to these assets so as to increase RNFS employment in India.

Understanding the Effects of China's Agro-Environmental Policies on Rural Households' Labor and Land Allocation with a Spatially Explicit Agent-Based Model.

Understanding household labor and land allocation decisions under agro-environmental policies is challenging due to complex human-environment interactions. Here, we develop a spatially explicit agent-based model based on spatial and socioeconomic data to simulate households' land and labor allocation decisions and investigate the impacts of two forest restoration and conservation programs and one agricultural subsidy program in rural China. Simulation outputs reveal that the forest restoration program accelerates labor out-migration and cropland shrink, while the forest conservation program promotes livelihood diversification via increasing non-farm employment. Meanwhile, the agricultural subsidy program keeps labor for cultivation on land parcels with good quality, but appears less effective for preventing marginal croplands from being abandoned. The policy effects on labor allocation substantially differ between rules based on bounded rational and empirical knowledge of defining household decisions, particularly on sending labor out-migrants and engaging in local off-farm jobs. Land use patterns show that the extent to which households pursue economic benefits through shrinking cultivated land is generally greater under bounded rationality than empirical knowledge. Findings demonstrate nonlinear social-ecological impacts of the agro-environmental policies through time, which can deviate from expectations due to complex interplays between households and land. This study also suggests that the spatial agent-based model can represent adaptive decision-making and interactions of human agents and their interactions in dynamic social and physical environments.

Effects of payments for ecosystem services programs in China on rural household labor allocation and land use: Identifying complex pathways

Payments for Ecosystem Services (PES) is increasingly used in developing countries to secure the sustainable provision of vital ecosystem services. The largest PES programs in the world are embedded in China’s new forest policies, which aim to expand forest cover for soil and water conservation and improve livelihoods of rural people. The objective of this study is to identify the complex pathways of the impacts of two PES programs , the Conversion of Cropland to Forest Program (CCFP) and the Ecological Welfare Forest Program (EWFP), on household livelihood decisions, and to quantify the direct and indirect impacts along the identified pathways. We fulfill this objective by developing an integrated conceptual framework and applying a Partial Least Squares-Structural Equation Model (PLS-SEM), based on household survey data from Anhui, China. Labor allocation (for on-farm work, local paid work, local business, or out-migration) and land use decisions (i.e., rent in, maintain, rent out, or abandon cropland) for participating households are key to understand PES program effects on livelihoods. Results show that the PES programs have only small direct effects but significant indirect effects via the mediating factor of capital assets. Moreover, group heterogeneity analysis shows that lower-income households do not benefit more than the better-off households from the PES programs, while households with medium wealth increase dependence on agriculture. In addition, household demographics, individual attributes, and geographic settings differ in their impacts on labor allocation and land use decisions. We conclude that CCFP and EWFP would be more efficient in conserving the environment while improving the economic welfare of lower-income households if capital assets were taken into account in the design of compensation schemes.

A distributionally robust credibilistic optimization method for the economic-environmental-energy-social sustainability problem

The existing literature on sustainable development problems mainly focuses on multicriteria decision analyses, and ignores the impact of uncertain information on optimal labor allocation decisions. It is necessary for sustainable development to implement suitable policies under uncertainty that integrate several competing aspects including economic, environmental, energy and social criteria. Based on type-2 fuzzy theory, this paper develops a distributionally robust optimization method for sustainable development problems. In our new model, the uncertain per capita gross domestic product (GDP), per capita electricity consumption and per capita greenhouse gas (GHG) emissions are characterized by parametric interval-valued (PIV) possibility distributions and their associated uncertainty distribution sets. Under two assumptions on the underlining decision-making environment, the robust counterpart of the original distributionally robust fuzzy sustainable development model is formally established. To solve the proposed robust sustainable development model, this paper discusses the computational issue concerning the infinitely many integral objective functions and credibilistic constraints, and turns the robust counterpart model into its computationally tractable equivalent deterministic submodels. Taking advantage of the structural characteristics of the equivalent submodels, a domain decomposition method is designed to find the robust optimal solution that can protect against distribution uncertainty. Finally, this paper applies the proposed optimization method for the key economic sectors of the United Arab Emirates (UAE) to provide quantitative justification in planning future labor and resource allocation.

Credit constraints and labour allocation decisions in rural Burkina Faso

PurposeCredit is central in labour allocation decisions in smallholder agriculture in developing countries. The purpose of this paper is to analyse the effect of credit constraints on farm households’ labour allocation decisions in rural Burkina Faso.Design/methodology/approachThe study used a direct elicitation approach of credit constraints and applied a farm household model to categorize households into four labour market participation regimes. A joint estimation of both the multinomial logit model and probit model was applied on survey data from Burkina Faso to assess the effect of credit constraint on the probability of choosing one of the four alternatives.FindingsThe results of the probit model showed that households’ endowment of livestock, access to news, and membership to an farmer-based organization were factors lowering the probability of being credit constrained in rural Burkina Faso. The multinomial logit model results showed that credit constraints negatively influenced the likelihood of a farm household to use hired labour in agricultural production and perhaps more importantly it induces farm households to hire out labour off farm. The results also showed that the other components of household characteristics and farm attributes are important factors determining the relative probability of selecting a particular labour market participation regime.Social implicationsFacilitating access to credit in rural Burkina Faso can encourage farm households to use hired labour in agricultural production and thereby positively impacting farm productivity and relieving unemployment pressures.Originality/valueIn order to identify the effect of credit constraints on farm households’ labour decisions, this study examined farm households’ decisions of hiring on-farm labour, supplying labour off-farm or simultaneously hiring on-farm labour and supplying family labour off-farm under credit constraints using the direct elicitation approach of credit constraints. To the best of the authors’ knowledge, this study is the first to examine this problem in Burkina Faso.

Land Acquisition, Labor Allocation, and Income Growth of Farm Households

ABSTRACTThis article investigates how land acquisition during urbanization affects labor allocation decisions of farm households in China. We develop an agricultural household model by including land acquisition to examine its impacts on nonfarm labor participation and income. Two data sets (self-designed household surveys at Xingwen County in 2012 and the China Household Finance Survey (CHFS) data covering 29 provinces in 2013) are adopted for empirical analysis. The results find that land reduction has significantly positive effects on the probability and the share of family nonfarm labor allocation from both data sets. We also find that land acquisition increases the household income of the land acquisition group in CHFS data.

Remittances and labour allocation decisions at communities of origin: the case of rural Mexico

ABSTRACTFrom a theoretical perspective, the effect that remittances have on the labour decisions of those that receive them is ambiguous; the empirical evidence reported in the literature is mixed and shows, unsurprisingly, that the net effect of remittances on labour supply is context-dependent. We contribute to this literature by using a detailed data set for rural Mexico that allows us to understand how remittances reshape rural livelihoods by modifying labour allocation decisions. Following previous evidence, we analyse female and male responses separately. Our results show that the income effect of remittances dominates male labour allocation decisions: the probability of participating in the labour market and the total number of hours worked decrease with remittances. We find no effect for female labour allocation decisions. The effects are not uniform across the different productive activities and remittances seem to be contributing to a trend in which Mexican rural inhabitants increasingly move away from agriculture- or nature-based activities. This reinforces the direct effect that emigration has in terms of a reduction in total supply of local labour.

Legal Recognition of Same‐Sex Relationships: New Possibilities for Research on the Role of Marriage Law in Household Labor Allocation

Research comparing the relative significance of economic exchange theories and gender norms on parents' division of income‐producing and domestic responsibilities often fails to consider sufficiently the role that marriage may play. This article shows that, in the United States, numerous aspects of state and federal law relating to marriage encourage spouses to specialize in distinct breadwinning and caretaking roles. Same‐sex marriage offers new opportunities to assess the importance of marriage in household labor allocation decisions while controlling for gender. For any data gathered before June 2015, however, it may be distorting to characterize same‐sex couples as simply “married” or “unmarried”; rather, legal recognition during the past 10 years is better conceptualized as discrete bundles of rights and tracked accordingly. This article, written by a legal scholar, provides substantive legal analysis that is integral to developing a research agenda in this area.

Cash Transfer Programme, Productive Activities and Labour Supply: Evidence from a Randomised Experiment in Kenya

This paper reports the analysis of the impact of Kenya’s Cash Transfer for Orphans and Vulnerable Children Programme on the household decisions on productive activities using data from a randomised experimental design. Results show that the programme had a positive and significant impact on food consumption coming from home production, accumulation of productive assets, especially on the ownership of small livestock, and on formation of nonfarm enterprise, especially for females. The programme has provided more flexibility to families in terms of labour allocation decisions, particularly for those who are geographically isolated. The programme was also found to reduce child labour, an important objective of the programme. However, we find very little impact of the programme on direct indicators of crop production.

Cash Transfer Programme, Productive Activities and Labour Supply: Evidence from a Randomised Experiment in Kenya

This paper reports the analysis of the impact of Kenya’s Cash Transfer for Orphans and Vulnerable Children Programme on the household decisions on productive activities using data from a randomised experimental design. Results show that the programme had a positive and significant impact on food consumption coming from home production, accumulation of productive assets, especially on the ownership of small livestock, and on formation of nonfarm enterprise, especially for females. The programme has provided more flexibility to families in terms of labour allocation decisions, particularly for those who are geographically isolated. The programme was also found to reduce child labour, an important objective of the programme. However, we find very little impact of the programme on direct indicators of crop production.

The Feminisation of Agriculture with Chinese Characteristics

The objectives of this article are to assess whether or not the feminisation of agriculture is occurring in China, and if so, to measure its impact on productivity. To meet these objectives, we rely on three data sets that allow us to explore who works on China's farms and the effects of the labour allocation decisions of rural households on productivity. We find that since the late 1990s, the role of women has increased in both the supply of farm labour and in the duties that they take on in the management of farms. While this expansion is important, we further demonstrate that when women do a majority of farm work or manage the farm, their farms are equally efficient as farms managed by men.

Market imperfections, liquidity, and farm household labor allocation: the case of rural South Africa

AbstractAsset endowments and market imperfections shape households’ labor allocation decisions and lead to different production regimes within rural farm households in South Africa. This article uses a farm household model to explain the presence of three main household groups determined on the basis of the labor regime adopted: small peasants (working both on and off farm), self‐cultivators (autarkic in labor) and hiring‐in households. A partial generalized ordered logit is used to test the main predictions of the model and a Brant test on threshold constancy is performed to identify the household‐specific factors affecting labor market participation. The results show that liquidity constraints and market imperfections matter in the choice of the labor strategy adopted. Liquidity‐constrained households are more likely to sell labor off farm while access to information facilitates the hiring in of workers.

Determinants of rural household labour allocation for wetland and other livelihood activities: The case of the Limpopo wetland in Southern Africa

ABSTRACT Wetland ecosystems provide a wide range of services supporting the livelihood of many rural communities in southern Africa. This study analyses factors influencing rural household labour allocation and supply decisions for competing livelihood activities, including wetland activities. The analyses employ the agricultural household framework, which takes into account that rural households are both producers and consumers. Results show that poor households are more dependent on wetland products and have less capacity to participate in off-farm opportunities, and hence allocate most of their labour time to farm and wetland activities. Better access to education is critical for enhancing employment potential in the non-farm sector, reducing pressure on wetland resources. Government policies that enhance access to education enable the poor to diversify into non-farm livelihood sources and provide necessary incentives for conserving wetland habitat. This has to be linked with broader rural development programmes such as improving access to markets, micro-credit and other small-scale income-generating activities.