The impact of extreme weather event on off-farm employment: Evidence from rural China

Abstract

Climate change poses unprecedented challenges to rural livelihoods worldwide, yet how rural households adapt to extreme weather events through labor reallocation remains poorly understood. This study examines the impact of extreme weather events (EWEs) on off-farm employment transitions among rural households in China, using panel data from the China Family Panel Studies (CFPS) spanning 2010–2020. We develop novel identification strategies to measure exposure to extreme precipitation events (EEPs) and heatwave events (HWEs) at the household level. Our findings reveal that EWEs significantly promote off-farm employment among rural households, serving as a key adaptation strategy to climate risks. This effect, however, is moderated by agricultural production conditions: mechanization amplifies households' ability to transition to off-farm work following weather shocks, while land transfer arrangements constrain such transitions. Furthermore, the impacts exhibit substantial heterogeneity across geographic and social contexts. In topographically diverse regions, persistent extreme precipitation reduces off-farm employment in agriculturally productive plains but increases it in vulnerable mountainous areas, while heat waves primarily drive labor transitions in plains where crops are more temperature-sensitive. Notably, households with female agricultural decision-makers demonstrate greater responsiveness to weather shocks compared to male-led households. These findings highlight the complex pathways through which climate change reshapes rural labor markets and suggest that effective adaptation policies must account for local agricultural systems, geographic constraints, and household characteristics to support resilient rural transformations.