Does Off-Farm Labor Relax Farmers' Credit Constraints? Evidence from Longitudinal Data for Vietnam

Abstract:     
We examine the relationship between participation in non-agricultural labor activities and farming production decisions, focusing on the use of inputs. In particular, we are interested in the hypothesis that income from non-agricultural labor relaxes credit constraints. Using longitudinal data for Vietnam from 1993-98, we find that households participating in non-agricultural labor activities, consistently with our hypothesis, spend significantly more on seeds, services, hired labor and livestock inputs.

Number of Pages in PDF File: 30

Keywords: rural labor markets, linkages, credit constraints, Vietnam

JEL Classification: J43, Q12

working papers series