Agricultural Productivity and Non-Farm Employment

Shilpi, Forhad; Emran, Shahe

Agricultural Productivity and Non-Farm Employment

2016

Shilpi, Forhad | Emran, Shahe

This paper provides evidence on the impacts of agricultural productivity on employment growth and structural transformation of non-farm activities. To guide the empirical work, this paper develops a general equilibrium model that emphasizes distinctions among non-farm activities in terms of tradable-non-tradable and the formal-informal characteristics. The model shows that when a significant portion of village income is spent on town/urban goods, restricting empirical analysis to the village sample leads to underestimation of agriculture's role in employment growth and transformation of non-farm activities. Using rainfall as an instrument for agricultural productivity, empirical analysis finds a significant positive effect of agricultural productivity growth on growth of informal (small-scale) manufacturing and skilled services employment, mainly in education and health services. For formal employment, the effect of agricultural productivity growth on employment is found to be largest in the samples that include urban areas and rural towns compared with rural areas alone. Agricultural productivity growth is found to induce structural transformation within the services sector with employment in formal/skilled services growing at a faster pace than that of low skilled services.

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AGROVOC Keywords

accounting agricultural development agricultural growth agricultural productivity agricultural sector agriculture climate change consumers consumption crop yield demand development development economics domestic markets economic growth economics effects elasticity employment equilibrium farm sector farm workers food processing food production growth rate household income human capital income industrialization informal sector information investment irrigation labor market equilibrium markets measurement motivation organizations policies poverty poverty reduction prices production production functions productivity risk rural areas rural population structural change supply trade unemployment wage rate wages welfare workers

Bibliographic information

Other Subjects

Active labor; Poor; Employment levels; Economic censuses; Agricultural employment; Agricultural wages; Employment level; Utility functions; Employment growth; Development policy; Gdp; Labor markets; Opportunity cost; Macroeconomic shocks; Rural economy; Firing costs; Farm employment; Employment situation; Rural; Productivity improvements; Market wage; Incidence of poverty; Expansion of irrigation; Labor force; Domestic market; Agricultural yields; Rural towns; Crop yields; Farm activities; Rural household; Utility; Goods; Exclusion restriction; Labor allocation; Measures; Productivity growth; Rural villages; Economy; Employment information; Labor market; Income growth; Labor mobility; Employment in agriculture; Externalities; Political economy; Disaggregated analysis; Domestic workers; Irrigation expansion; Inequality; Productivity increase; Outcomes; Poor people; Theory; Rural household income; Jobs; Employment share; Total factor productivity; Variables; Rural income; Export market; Interest rate; Labor supply; Non-farm employment; Rural inequality; Non-farm sector; Agricultural productivity growth; Agricultural wage; Total labor force; Productivity increases; Water for irrigation; International market; Unemployed; Labor cost; Supply curve; Food price; Production function; General equilibrium; Employment composition; Labor demand; Total employment; Utility function; Labor regulations; Division of labor; Informal employment; Crop scientists; Optimization; Real wage; Farm growth; Labor migration; Employees

Language

English

In AGRIS since: 2021-06-15

Format: AGRIS AP

Data Provider

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Links

http://hdl.handle.net/10986/24520

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