Rainfall Shocks and the Gender Wage Gap: Evidence from Indian Agriculture

Abstract

In the context of climate change and its effect on poverty, previous studies have shown that productivity shocks in agriculture, such as rainfall variability, affect wages adversely. None of the studies, however, consider the heterogeneity in the impact of these shocks on agricultural wages by gender, a feature which has been studied for demand shocks in urban labor markets for developed countries. Using National Sample Survey data for India from 1993 to 2007, a district-level panel dataset is created to examine how a rainfall shock affects the gender wage gap. The study shows that both female and male wages are positively related to rainfall shocks. Hence, future studies must study the impact of labor market shocks in rural areas on both female and male wages separately. It also finds that the female-to-male wage ratio is significantly positively associated with a rainfall shock in regions where rainfed rice is cultivated, i.e., low (high) rainfall reduces (increases) the female-to-male ratio. The study demonstrates that this result is due to a positive association of demand for female labor with rainfall in these rainfed rice-growing regions. This finding is consistent with the greater marginal value of female labor in rice cultivation, which is also a crop highly sensitive to rainfall variability under rainfed conditions. The paper concludes that the effect of a rainfall shock on the gender wage gap depends upon the gender roles underlying the technology of production, which varies across cropping systems.