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Poor households in rural Bangladesh often face concurring idiosyncratic and aggregate shocks, which have adverse impacts on their income and consumption. In this study, we investigate the transmission channels, coping responses, and economic consequences of different shocks including idiosyncratic adverse health events and aggregate agricultural productivity shocks. We use a balanced panel data of 5,655 rural households - interviewed every year between 2010 and 2013 - in northern Bangladesh. We estimate the effects of adverse health shocks on the consumption levels of poor households in a multi-shock framework. We take advantage of the panel data and use fixed effect models to control for unobserved household-level confounders and potential endogeneity. We further examine effects of shocks to agricultural wages on consumption using rainfall as an instrument. We further carry out a number of robustness checks to understand how sensitive our models are to different alternate specifications. Results indicate that households smooth their consumption after experiencing adverse health shocks, with and without the parallel incidence of other types of shocks. Consumption smoothing occurs despite households experiencing a significant decrease of wage income, which appears to be driven by an increase in informal loans from money lenders and households' social networks. To evaluate the effect of a different type of income shock on consumption, we use rainfall as an exogenous instrument for agricultural income. Results indicate that while higher rainfall leads to a significant increase in agricultural income, it does not translate to higher food expenditure for households. Together, these findings offer suggestive evidence that, in this setting, households appear to smooth food consumption in the face of income shocks. Poor households rely on formal and informal, potentially costly channels and exploit existing social networks to insure themselves against adverse shocks. The findings highlight the importance of developing a better framework to evaluate and implement more equitable social safety net policies. [ABSTRACT FROM AUTHOR]

This paper uses a framework that goes beyond rural-urban dualism and highlights the role of small-town economy in understanding structural change in a developing country. It provides a theoretical and empirical analysis of the role of agricultural productivity in structural transformation in the labor market in small towns and the surrounding rural areas. The empirical work is based on a general equilibrium model that formalizes the demand and labor market linkages: the small-town draws labor away from the rural areas to produce goods and services whose demand may depend largely on rural income. The theory clarifies the role played by the income elasticity of demand and the elasticity of wage with respect to productivity increase in agriculture. For productivity growth to lead to a demand effect, the wage elasticity has to be lower than a threshold. When the demand for goods and services produced in small towns comes mainly from the adjacent rural areas, the demand effect can outweigh the negative wage effect and lead to higher employment in the town-goods sector. The empirical analysis finds a significant positive effect of higher rainfall on rice yield and wages. Using rainfall shocks as a source of exogenous variation, we provide instrumental variables estimates of the effects of agricultural productivity on agricultural wages. The increase in wages is larger in the rural sample compared with the small town economy sample, but structural change in employment is more pronounced in the small town economy. In the rural sample, the positive employment effect is observed only in small-scale manufacturing and services. In contrast, a positive productivity shock in small towns sample has large and positive effect on employment in large scale manufacturing and services (construction, transport, education, and health). Agricultural productivity growth induces structural transformation within the services sector in small towns, with employment in skilled services growing at a faster pace than that in low skilled services. [ABSTRACT FROM AUTHOR]

This paper provides an overview of recent developments in rural labour markets in Bangladesh and also examines the trends and movements of agricultural productivity and real wages with annual data for the period 1950-2006. The paper links the movements of agricultural real wages to macroeeonomic developments in general and agricultural development in particular. As part of empirical investigation, the paper develops a simple model of agricultural real wages that depend on agricultural productivity. In order to examine the long-run relationship between agricultural productivity and real wages, the paper applies the Autoregressive Distributed Lag Bounds testing approach. Empirical results suggest that there exists a long-run relationship between agricultural productivity and real wages, and that agricultural productivity can be treated as a 'long-run forcing variable' in explaining agricultural real wages. In the dynamic specification of real wages, the coefficient on oneperiod lagged error-correction term bears the expected negative sign and is significant. The forecasting ability of the error correction model is satisfactory with respect to the level or the percentage change of real wages. The overall results are consistent with the findings of earlier studies that agricultural productivity is a key determinant of real wages in Bangladesh. [ABSTRACT FROM AUTHOR]

Summary: This paper analyzes the effects of riverine floods on agricultural wages in Bangladesh. Drawing upon the district-wise monthly data over 1979–2000, we model wages as a dynamic process. We find that floods have positive implications for wages in the long run. In flood months, however, agricultural wages decline in the inundated districts. We obtain difference-in-difference estimates to show that the magnitude of impact of flood depends on the relative flood proneness of a district and the relative severity of flood conditions. Our results indicate that favorable demand and supply conditions in the agricultural labor market can mitigate the impact of disasters on wages in Bangladesh. [Copyright &y& Elsevier]

Explains the coexistence of involuntary wage-unemployment in poor agriculture, using the income earning behavior of the working poor in landless and near-landless labor households. Review of existing literature on rural labor markets in less developed countries; Examination of the economic condition and income-earning behavior of the working poor in three villages in Bangladesh.

Comments on the article `Agricultural Wages in Bangladesh: What do the Figures Really Show?' by Martin Ravallion published in the December 1994 issue of the periodical `The Journal of Development Studies.' Focus on inquiries concerning the evolution of agricultural wages in Bangladesh; Limitations of Ravallion's study.

Focuses on trends in the real agricultural wage rates in Bangladesh for the period 1949 to 1989. Evolution over time of agricultural wages in Bangladesh; Relationship between agricultural growth and poverty; Role of agricultural wages in rural Bangladesh.

A long-run negative impact of population growth upon real wages is neither theoretically self-evident nor, in the case of rural Bangladesh, empirically clear-cut. In addition to its negative 'labour supply effect', population growth may have a positive 'labour demand effect' upon wages. The latter may help to explain why Bangladeshi districts with higher rural population densities have higher agricultural wages, and why districts with more rapid population growth in the first half of this century subsequently experienced slower-than-average real wage declines. An investigation of agricultural growth and agrarian structure as mediating variables in the population-wage relation indicates that changes in average operational holding size, inequality of landholdings, and the extent and nature of tenancy contributed to this result. [ABSTRACT FROM AUTHOR]

The article investigates the dynamics of agricultural wage determination in Bangladesh. It focuses on the influence of changes in relative prices and productivity. Previous studies on wage determination in Bangladesh are given. A dynamic model of agricultural wage determination is presented. The article identified a number of limitations in past research on agricultural wage determination in Bangladesh and offered a new dynamic model which avoids the problems.