Speaker: Esther Gehrke is a researcher at the German Development Institute. More »

Abstract: In this paper, we analyze the effect of consumption risk on households' labor supply, time allocated to home production and schooling over different periods of the agricultural cycle. We show theoretically and empirically that uncertainty regarding future consumption increases current labor supply of women at the intensive margin and reduces the time working women allocate to household chores. We further show that this leads to a reduction in time children in those households spend on school activities (both in school and studying at home) because they have to perform part of the home production. We argue that an income smoothing policy (such as the Indian Employment Guarantee) could reduce labor supply of women at the intensive margin allowing children to spend more time in school and reducing periodic school dropouts.

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Last Updated: Sep 02, 2015