Abstract

How do fluctuations in income affect labor supply decisions, and how do their effects differ by gender? This study analyzes data from a thirteen-year rolling panel in Kyrgyzstan spanning 2004–16. It addresses the endogeneity of fluctuations in income to labor supply decisions by employing shift share instruments that exploit region-level changes over time in growth rates of different sources of revenue and production costs. Estimating a household fixed effects model, the study finds that reductions in income relative to the median spur departure from the household (for example, due to migration), with smaller impacts on women than men. However, women’s labor supply at the origin is affected significantly more, with short-term increases in hours of employment and declines in home production and other activities. Reductions in income also fuel temporary migration for both genders, with larger effects for men, and widen the gender gap in pursuit of non-compulsory education. HIGHLIGHTS Declines in income spur household departure, with larger impacts on men than women. Women are not always “left behind” following shocks; like men, they respond through changes in labor supply and livelihood decisions. At the origin, women face significantly greater increases in workloads than do men. Declines in income widen the gender gap in pursuit of non-compulsory education, favoring men. Policies that support women’s ability to control income can promote domestic work sharing and ensure income generation empowers women.