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Labor supply responses to adverse shocks under credit constraints: evidence from Bukidnon, Philippines

Philippine Review of Economics

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Title Labor supply responses to adverse shocks under credit constraints: evidence from Bukidnon, Philippines
 
Creator Malapit, Hazel Jean; Action for Economic Reforms
Redoblado, Jade Eric; Graduate Program, UP School of Statistics
Cabungcal-Dolor, Deanna Margarett; University of the Philippines College of Education
Suministrado, Jasmin; Center for Conscious Living Foundation, Inc. Philippines
 
Subject labor supply; credit constraints; consumption smoothing; coping strategies; idiosyncratic shocks; Philippines
 
Description The ability of households to insure consumption from adverse shocks is an important aspect of vulnerability to poverty. How is consumption insurance achieved in a low-income setting where formal credit and insurance markets have been observed to be imperfect or missing? Using 2003 data from the Philippine province of Bukidnon, we investigate how labor supply is used to buffer transitory income shocks in light of credit constraints. We find that the most vulnerable households are those with little education and with few or no able-bodied male members. Appropriate policy responses include countercyclical workfare programs directed at households with high female-to-male ratios, households with high dependency ratios, and households with little or no education, as well as the provision of universal education and health care. These programs are likely to be effective in strengthening the labor endowments of households and improving their ability to cope with adverse shocks in the future. JEL classification: J22, J43
 
Publisher Philippine Review of Economics
 
Contributor —
 
Date 2010-09-28
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.econ.upd.edu.ph/pre/index.php/pre/article/view/176
 
Source Philippine Review of Economics; Vol 45, No 2 (2008)
1655-1516
 
Language eng
 
Relation http://www.econ.upd.edu.ph/pre/index.php/pre/article/view/176/641
 
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