This paper studies the use of labor markets to mitigate the impact of violent shocks on households in rural areas in Colombia. It examines changes in the labor supply from on-farm to off-farm labor as a means of coping with the violent shock and the ensuing redistribution of time within households. It identifies the heterogeneous response by gender. Because the incidence of violent shocks is not exogenous, the analysis uses instrumental variables that capture several dimensions of the cost of exercising terror. As a response to the violent shocks, households decrease the time spent on on-farm work and increase their supply of labor to off-farm activities (non-agricultural ones). Men carry the bulk of the adjustment in the use of time inasmuch as they supply the most hours to off-farm non-agricultural work and formal labor markets. Labor markets do not fully absorb the additional labor supply. Women in particular are unable to find jobs in formal labor markets and men have increased time dedicated to leisure and household chores. Additional off-farm supply does not fully cover the decrease in consumption. The results suggest that in rural Colombia, labor markets are a limited alternative for coping with violent shocks. Thus, policies in conflict-affected countries should go beyond short-term relief and aim at preventing labor markets from collapsing and at supporting the recovery of agricultural production.
Details
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Author
Suarez Fernandez,Mario Manuel, Ibanez,Ana Maria, Pena,Ximena
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Document Date
2011/06/01
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Document Type
Policy Research Working Paper
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Report Number
WPS5684
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2011/06/01
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Disclosure Status
Disclosed
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Doc Name
Adjusting the labor supply to mitigate violent shocks : evidence from rural Colombia
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Keywords
rural district;Labor Market;Poverty Reduction & Economic Management;armed groups;formal labor market;per capita income growth;rental price of capital;Violations of Human Rights;access to labor market;gender and development;labor supply;reduction in consumption;impact of conflict;care of child;agriculture and livestock;civilian population;illicit drug trade;source income;source of income;costs of conflict;lack of water;supply of labor;flow of resource;land Gini coefficient;source of financing;sale of asset;informal land market;income of household;military and police;durable goods ownership;rural labor market;expropriation of land;proportion of income;consequences of conflict;seizure of asset;transfer program;human capital accumulation;number of victims;price of good;types of violence;incidence conflict;labor market activity;risk management mechanism;production due;per capita consumption;human capital loss;impact of shock;response to shock;labor income;land plot;instrumental variable;homicide rate;native population;covariate shock;labor outcomes;agricultural production;rural area;productive asset;rebel group;colonial times;Violent Conflict;idiosyncratic shock;effective strategy;empirical evidence;forced displacement;household characteristic;aggregate consumption;descriptive statistic;
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Citation
Suarez Fernandez,Mario Manuel Ibanez,Ana Maria Pena,Ximena
Adjusting the labor supply to mitigate violent shocks : evidence from rural Colombia (English). Policy Research working paper ; no. WPS 5684 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/452911468240888130/Adjusting-the-labor-supply-to-mitigate-violent-shocks-evidence-from-rural-Colombia