The impact of rainwater harvesting on household labor supply

This paper explores the effects of rainwater harvesting (RWH) on aggregate household labor supply in areas prone to droughts. Using a Brazilian survey on rainwater harvesting, we find that having a RWH infrastructure at the homestead increases household wellbeing through three channels: (i) a direct time allocation effect - since households spend less time fetching water from distant sources, the time saved is allocated to other productive activities; (ii) a direct input effect - since water is an essential input for agricultural households and more labor hours are available, the cistern technology may contribute to increase the household's agricultural production. Both direct effects associate the labor-saving technology with an increase in productive labor supply. Finally, there is (iii) an indirect consumption effect - as a consequence of larger production, households can exchange larger quantities of own production against market goods, further increasing the household wellbeing.

JEL Classification: I32, I38, L95, Q25

Keywords: poverty, access to water, risk coping, labor supply