availability, knowledge and education, risk preferences, profitability, and credit constraints receiving much attention. This paper … explored in panel data for Ethiopia. Historical rainfall distributions are used to identify the counterfactual consumption risk …

-sections between wages and profitability. The alternative explanation of risk sharing between workers and employers has not been tested …. Using a unique panel data set for four African countries we find strong evidence of risk sharing. Workers in effect offer … insurance to employers: when firms are hit by temporary shocks the effect on profits is cushioned by risk sharing with workers …