Labor Markets and Poverty in Village Economies

75 Pages Posted: 10 Oct 2016

See all articles by Oriana Bandiera

Oriana Bandiera

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Robin Burgess

London School of Economics (LSE) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Narayan Das

BRAC

Selim Gulesci

Bocconi University - Department of Economics

Imran Rasul

University College London - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Munshi Sulaiman

BRAC-Africa

Date Written: October 2016

Abstract

We study how women's choices over labor activities in village economies correlate with poverty and whether enabling the poorest women to take on the activities of their richer counterparts can set them on a sustainable trajectory out of poverty. To do this we conduct a large-scale randomized control trial, covering over 21,000 households in 1,309 villages surveyed four times over a seven year period, to evaluate a nationwide program in Bangladesh that transfers livestock assets and skills to the poorest women. At baseline, the poorest women mostly engage in low return and seasonal casual wage labor while wealthier women solely engage in livestock rearing. The program enables poor women to start engaging in livestock rearing, increasing their aggregate labor supply and earnings. This leads to asset accumulation (livestock, land and business assets) and poverty reduction, both sustained after four and seven years. These gains do not crowd out the livestock businesses of noneligible households while the wages these receive for casual jobs increase as the poor reduce their labor supply. Our results show that: (i) the poor are able to take on the work activities of the non-poor but face barriers to doing so, and, (ii) one-off interventions that remove these barriers lead to sustainable poverty reduction.

JEL Classification: J22, O12

Suggested Citation

Bandiera, Oriana and Burgess, Robin and Das, Narayan and Gulesci, Selim and Rasul, Imran and Sulaiman, Munshi, Labor Markets and Poverty in Village Economies (October 2016). CEPR Discussion Paper No. DP11554, Available at SSRN: https://ssrn.com/abstract=2850396

Oriana Bandiera (Contact Author)

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 7519 (Phone)
+44 20 7055 6951 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Robin Burgess

London School of Economics (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom

HOME PAGE: http://econ.lse.ac.uk/staff/rburgess/index_own.html

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Narayan Das

BRAC ( email )

75 Mohakhali
BRAC Center, 75 Mohakhali ,Dhaka, Bangladesh
Dhaka-1212
Bangladesh

Selim Gulesci

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

Imran Rasul

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom
+44 20 7679 5853 (Phone)
+44 20 7916 2775 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Munshi Sulaiman

BRAC-Africa ( email )

Liberia

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