Modeling the decline of labor-sharing in the semi-desert region of Chile

The rapid environmental changes currently underway in many dry regions of the world, and the deep uncertainty about their consequences, underscore a critical challenge for sustainability: how to maintain cooperation that ensures the provision of natural resources when the benefits of cooperating are variable, sometimes uncertain, and often limited. In this work, we present the case of a group of rural communities in a semi-desert region of Chile, where cooperation in the form of labor-sharing has helped maintain higher agriculture yields, group cohesion, and identity. Today, these communities face the challenge of adapting to recurrent droughts, extreme rainfall, and desertification. We formulated an agent-based model to investigate the consequences of regional climate changes on the fate of these labor-exchange institutions. The model, implemented in the framework of prospect theory, simulates the economic decisions of households to engage, or not, in labor-sharing agreements under different scenarios of water supply, water variability, and socio-environmental risk. Results show that the number of fulfilled labor-sharing agreements is reduced by water scarcity and environmental variability. More importantly, defections that involve non-fulfillment of these agreements are more likely to emerge at the intermediate level of environmental variability and water supply stress. These results underscore the need for environmental policy instruments that consider the effects of regional climate changes on the social dynamics of these communities.