Rainfall Shocks and the Gender Wage Gap
Source: Flickr, Knut-Erik Helle
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Indian agriculture is, to a large extent, dependant on rainfall and employs large numbers of male and female farmers/labourers.

A recent paper in World Development investigates the impact of rainfall shocks on the gender wage gap in Indian agriculture. This study is significant as, in the context of increasing climate change, previous studies have shown that productivity shocks in agriculture, such as rainfall variability, affect wages adversely, however, none of these studies considers the impact on agricultural wages by gender.

This study uses National Sample Survey data for India from 1993 to 2007 to create a district-level panel dataset, covering 14 states, to examine how a rainfall shock affects male and female agricultural wages. This data is further complemented by data on area and yield of crops obtained from Area, Production and Yield statistics (1999–2008) published by Indian Ministry of Agriculture and rainfall data from the Center of Climatic Research. Through a series of equations, the study estimates the impact of rainfall shocks on the agricultural wages of males and females. In addition, the study estimates the impact of rainfall shocks on agricultural wages for both males and females while controlling a number of variables, including crops grown and education.

The study finds that both female and male wages are negatively affected by negative (low) rainfall shocks. More specifically the study shows that, keeping other factors constant, female daily wages reduce by 15 percent and male daily wages by 10 percent over a year period when a negative rainfall shock occurs.  Controlling for various variables the study finds that when rice is cultivated a rainfall shock does not have a further effect on female wages but does find that a negative rainfall shock reduces the female to male wage ratio by 10 percent over the period of a year.  The paper discusses that this can either be due to a greater fall in demand for female labor relative to male labor or a greater increase in the supply of female labor relative to male labor in the rainfed rice systems of India. This finding is significant as a lower female wage rate in the labor market relative to that of males can lead to a reduction in the bargaining power of females within the household. In addition, the female wage rate is already below that of males in Indian agriculture and a shock that reduces the female daily wage rate further makes them more vulnerable and reduces their ability to smooth consumption. This especially has implications for food security in female-headed households during years of low rainfall. Regarding education, the study finds that a 10 percent increase in the educated population in a district reduces the variability of both female and male wages to a rainfall shock by 2.8 percent and 2 percent respectively. This is significant as it shows that more human capital accumulation can help farmers in coping with rainfall shocks. The paper discusses that this finding can either be due to improved knowledge among educated farmers to cope with shocks or due to other employment opportunities in the non-farm sector that education provides.

In conclusion, the paper highlights that these findings can support the creation of a more gender sensitive agricultural and labor policy. For instance, the government can commission public works programs in years that experience rain shocks in which males and females are paid equally. These kinds of interventions are significant as they can help reduce the variability in female wages and the gender wage gap. The paper also highlights the importance of increasing and improving irrigation systems across India as they can help support overall household incomes as well as reduce the variability of female wages due to rainfall shocks.

The full paper can be accessed here

By: Bas Paris

Photo credit:Flickr, Knut-Erik Helle