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Rainfall variability, occupational choice, and welfare in rural Bangladesh

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  • Bandyopadhyay, Sushenjit
  • Skoufias, Emmanuel

Abstract

This study investigates the choice of occupational focus versus diversification between household members in rural Bangladesh as an autonomous and proactive adaptation strategy against ex ante local rainfall variability risks. The analysis combines nationally representative household level survey data with historical climate variability information at the Upazila level. The authors note that flood prone Upazilas may face reduced risks from local rainfall variability as compared with non-flood prone Upazilas. They find that two members of the same household are less likely to be self-employed in agriculture if they live in an area with high local rainfall variability. However, the occupational diversification strategy comes at a cost to households in terms of consumption welfare. The paper considers the effects of three policy actions, providing access to credit, safety net, and market. Access to market appears to be more effective in reducing the likelihood of costly within-household occupational diversification as an ex ante climate risk-reducing strategy as compared with access to credit and safety net.

Suggested Citation

  • Bandyopadhyay, Sushenjit & Skoufias, Emmanuel, 2012. "Rainfall variability, occupational choice, and welfare in rural Bangladesh," Policy Research Working Paper Series 6134, The World Bank.
    • Handle: RePEc:wbk:wbrwps:6134
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    References listed on IDEAS

    as
    1. Hanan G. Jacoby & Emmanuel Skoufias, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(3), pages 311-335.
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    3. Banerjee, Lopamudra, 2007. "Effect of Flood on Agricultural Wages in Bangladesh: An Empirical Analysis," World Development, Elsevier, vol. 35(11), pages 1989-2009, November.
    4. World Bank, 2008. "Poverty Assessment for Bangladesh," World Bank Publications - Reports 28239, The World Bank Group.
    5. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
    6. World Bank, 2008. "Bangladesh - Poverty Assessment for Bangladesh : Creating Opportunities and Bridging the East-West Divide," World Bank Publications - Reports 6144, The World Bank Group.
    7. Rosenzweig, Mark R & Binswanger, Hans P, 1993. "Wealth, Weather Risk and the Composition and Profitability of Agricultural Investments," Economic Journal, Royal Economic Society, vol. 103(416), pages 56-78, January.
    8. World Bank, 2008. "Bangladesh - Poverty Assessment for Bangladesh : Creating Opportunities and Bridging the East-West Divide," World Bank Publications - Reports 7886, The World Bank Group.
    9. Nidhiya Menon, 2009. "Rainfall Uncertainty and Occupational Choice in Agricultural Households of Rural Nepal," Journal of Development Studies, Taylor & Francis Journals, vol. 45(6), pages 864-888.
    10. Mahabub Hossain, 2004. "Rural Non-Farm Economy in Bangladesh: A View from Household Surveys," CPD Working Paper 40, Centre for Policy Dialogue (CPD).
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    More about this item

    Keywords

    Science of Climate Change; Hazard Risk Management; Climate Change Mitigation and Green House Gases; Housing&Human Habitats; Water Conservation;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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