Neighborly Business: Labor Exchange Networks and Wage Markets in Rural Thailand
Job Market Paper
Why does unpaid reciprocal labor persist after rural wage markets develop? To answer this question, we study the allocation of household labor following surprise increases in crop returns. Using monthly bilateral paid and unpaid labor transactions from 16 Thai villages, we build a Bartik-type shift-share measure of crop-return innovations using unexpected changes in world prices and pre-set village crop specialization, interacted with each crop’s harvest timing. An unexpected increase in crop prices near harvest time reallocates both labor exchange and hiring toward established partners relative to previously untied potential providers. The findings show that established relationships help mobilize labor when timely agricultural work becomes more valuable and provide new evidence on the role of relational infrastructure in organizing paid work in rural labor markets.
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