Abstract
The focus of this paper is on the worksharing in Philippine rice-farming communities. In these villages, farmers depend on hired labor provided by landless, other farmers and their families. This implies that farmers share agrarian work with each other, especially in transplanting and harvesting. I define mutual employment as work-sharing by farmers and their families under hired labor contracts. Such contracts are accompanied by incomesharing, because payment includes a share of the harvested yield, normally one sixth to one eighth.
Why do farmers hire each other? One explanation is the uncertainty of yields arising from disparities in the condition of fields. For example, lowland is prone to flooding, while upland is prone to drought. Mutual employment implies that the farmers harvest from both type of field and the low of large numbers clearly applies in this case. So, the farmers hired each other share risk and reduce variance of the gross income compared with that of yield. And the farmers don't have a problem of the moral hazard since they monitor each other in transplanting and harvesting. Risksharing and incentive are compatible in mutual employment system.
