Rainfall Forecasts, Weather and Wages Over the Agricultural Production Cycle

15 Pages Posted: 17 Jan 2014 Last revised: 15 Feb 2023

See all articles by Mark R. Rosenzweig

Mark R. Rosenzweig

Yale University - Economic Growth Center; Yale University - Cowles Foundation

Christopher Udry

Northwestern University

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Date Written: January 2014

Abstract

We look at the effects of rainfall forecasts and realized rainfall on equilibrium agricultural wages over the course of the agricultural production cycle. We show theoretically that a forecast of good weather can lower wages in the planting stage, by lowering ex ante out-migration, and can exacerbate the negative impact of adverse weather on harvest-stage wages. Using Indian household panel data describing early-season migration and district-level planting- and harvest-stage wages over the period 2005-2010, we find results consistent with the model, indicating that rainfall forecasts improve labor allocations on average but exacerbate wage volatility because they are imperfect.

Suggested Citation

Rosenzweig, Mark Richard and Udry, Christopher, Rainfall Forecasts, Weather and Wages Over the Agricultural Production Cycle (January 2014). NBER Working Paper No. w19808, Available at SSRN: https://ssrn.com/abstract=2380440

Mark Richard Rosenzweig (Contact Author)

Yale University - Economic Growth Center ( email )

Box 208269
New Haven, CT 06520-8269
United States
203-432-3620 (Phone)

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

Christopher Udry

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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