European Review of Agricultural Economics · 2024 · 24 citations · 41 references
AgricultureAgricultural EconomicsEconomicsAgricultural DevelopmentRural DevelopmentRural EconomicsAgricultural AdaptationAgricultural Household EconomicsDroughtDrought AdaptationRural Household EconomicsRural Labor Force DynamicsClimate ResilienceDrought Adaptation In AgricultureDrought Effects On ProductivityDrought IntensityProductivity Under DroughtRural Drought AdaptationRural Household Labor AllocationRural Resilience
Abstract We study how rural households in Ethiopia adapt to droughts through labour reallocation. Using three waves of panel data and exploiting spatio-temporal variations in drought exposure, we find that households reduce on-farm work and increase off-farm self-employment in response to both short-term and persistent droughts, without abandoning family farming. Diversification into off-farm activities is driven by drought-related productivity declines in agriculture and contributes to consumption smoothing and food security. Households with better access to financial services are more likely to reallocate labour off-farm. Our results highlight the importance of strengthening the rural non-farm economy to enhance rural households’ climate resilience.
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