Ulrik Beck, University of Copenhagen: "Coffee Price Volatility and Household Response: Evidence from Vietnam"

Volatility in commodity markets pose an urgent risk to farmers in developing countries who rely on cash crop agriculture. The use of child labor is of particular concern, since child labor can interfere with human capital formation and reduce future economic growth.  This paper investigates coping mechanisms employed by farmers in a transitioning economy. We exploit movements in the international price of coffee to uncover the effects on intra-household labor allocation by coffee-growing households in Vietnam’s Central Highlands region. We find that households cope with low coffee prices by increasing wage labor of adults and adolescents as well as increasing the use of children and adolescents work on the farm. On a positive note, we do not find impacts on schooling outcomes.