The Impact of Rainwater Harvesting on Household Labor Supply

This paper explores the e ects of rainwater harvesting (RWH) on aggregate household labor supply in areas prone to droughts. Using a Brazilian survey on rainwater harvesting, we nd that having a RWH infrastructure at the homestead increases household wellbeing through three channels: (i) a direct time allocation e ect since households spend less time fetching water from distant sources, the time saved is allocated to other productive activities; (ii) a direct input e ect 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 e ects associate the labor-saving technology with an increase in productive labor supply. Finally, there is (iii) an indirect consumption e ect as a consequence of larger production, households can exchange larger quantities of own production against market goods, further increasing the household wellbeing. JEL Classi cation: I32, I38, L95, Q25