Climate variability has become much more obvious as a result of global climate change. Livelihood diversification including crop and income diversification is one of the most remarkable strategies to manage risk and cope with economic and climate shocks in order to improve rural livelihood. We investigate the empirical linkages among climate variability, livelihood diversification, and household food security, exploiting three waves of nationally representative rural household panel data merged with granular climate data in Bangladesh. Using control function approach and IV regression to control for possible endogeneity of livelihood diversification, we find that seasonal rainfall shock and temperature shock affect livelihood diversification, then livelihood diversification improves household food security. Taken together, the results suggest that promoting the diversification strategies through investing in socio-economic factors, institutional conditions, and infrastructure., thus they can help to address the food insecurity of farmers under climate change in Bangladesh.
Climate variability has become much more obvious as a result of global climate change. Livelihood diversification including farm and income diversification is one of the most remarkable strategies to manage risk and cope with economic and climate shocks in order to improve rural livelihood. We investigate the empirical linkages among climate variability, livelihood diversification, and household food security, exploiting three waves of nationally representative rural household panel data merged with granular climate data in Bangladesh. Using two-stage residual inclusion and fixed effect regressions, we find that climate variability affects income diversification, and income diversification improves household food security. In particular, the impact of income diversification is higher for the richest households through non-farm income and decreases monotonically moving toward the bottom of the welfare distribution. These findings suggest making more attractive livelihood strategies available to the rural poor, in terms of socio-economic factors institutional conditions, and infrastructure.