Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/283150 
Year of Publication: 
2023
Series/Report no.: 
ZEF Discussion Papers on Development Policy No. 334
Publisher: 
University of Bonn, Center for Development Research (ZEF), Bonn
Abstract: 
We study how rural households in Ethiopia adapt to droughts through labor reallocation. By using three waves of panel data and exploiting spatial-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. Households with better access to markets and financial services find it easier to reallocate labor off-farm. Our results highlight the importance of strengthening the rural non-farm economy to enhance rural households' climate resilience.
Subjects: 
Climate change
labor allocation
labor markets
Africa
Ethiopia
JEL: 
Q54
J21
J22
J43
O13
Document Type: 
Working Paper

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