Evaluation of Abrams curve in agricultural sector using the NARDL approach
2024
Zeraatkish Seyed Yaghoub | Rajabalipour Mohammad Javad | Moghaddasi Reza
Developing countries have made significant economic progress in the recent decades, but agriculture sector has not produced enough value add for the economy due to the low productivity in this sector, which contributes to poverty and delays in the growth of the entire economy in such countries. The aim of this research is to evaluate Abram’s theory in the agricultural sector of Iran using the nonlinear autoregressive distributed lag (NARDL) approach over the years 1981–2021. To this end, the effect of government size, agricultural sector wages, value add of the agricultural sector, inflation rate, mechanization coefficient, and the ratio of agricultural sector wages to other economic sectors on the unemployment rate of the agricultural sector were investigated. In the first step, stationarity of variables was examined by applying the generalized Dickey–Fuller and Phillips–Peron methods. Outcomes of the unit root test showed that the degree of cointegration between variables was zero and one, and there were no limitations to the application of the NARDL approach. Results showed that the Abrams curve would not be confirmed for the agricultural sector in Iran, because the coefficient obtained for the size of the state was negative. Also, the findings suggest that the government’s size affects the unemployment rate in the agricultural sector, while real wages in Iran’s agricultural sector impact unemployment.
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