Structural Transformation and the Agricultural Wage Gap

Structural Transformation and the Agricultural Wage Gap
Author: Jorge Alvarez
Publisher: International Monetary Fund
Total Pages: 53
Release: 2017-12-22
Genre: Business & Economics
ISBN: 1484335449

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A key feature of developing economies is that wages in agriculture are significantly below those of other sectors. Using Brazilian household surveys and administrative panel data, I use information on workers who switch sectors to decompose the drivers of this gap. I find that most of the gap is explained by differences in worker composition. The evidence speaks against the existence of large short-term gains from reallocating workers out of agriculture and favors recently proposed Roy models of inter-sector sorting. A calibrated sorting model of structural transformation can account for the wage gap level observed and its decline as the economy transitioned out of agriculture.

Structural Transformation of the Agricultural Sector in Low- and Middle-Income Economies

Structural Transformation of the Agricultural Sector in Low- and Middle-Income Economies
Author: Klaus Deininger
Publisher:
Total Pages: 0
Release: 2022
Genre:
ISBN:

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Movement of labor from agriculture to nonagriculture and the associated increase in farm size through structural transformation are at the core of economic development. We conduct a comprehensive review of the literature exploring the causes and consequences of the transformation. We discuss (a) the size and determinants for the persisting wage gap between agriculture and nonagriculture, (b) policy-induced barriers to structural changes, (c) the role of trade costs and technical change in shaping the nature of structural transformation and comparative advantage of regions, and (d) how the overall development of an economy affects the relationship between farm size and farm productivity and hence changes competitiveness of different scales of farms. We also identify questions for policy and research and the ways in which new sources and interoperability of data can help answer these questions.

Growth and Structural Transformation

Growth and Structural Transformation
Author: Kwang Suk Kim
Publisher: BRILL
Total Pages: 224
Release: 2020-03-17
Genre: History
ISBN: 1684172195

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This study provides a comprehensive overview of Korea’s macroeconomic growth and structural change since World War II, and traces some of the roots of development to the colonial period. The authors explore in detail colonial development, changing national income patterns, relative price shifts, sources of aggregate growth, and sources of sectoral structural change, comparing them with other countries.

Structural Transformation and the Agricultural Wage Gap

Structural Transformation and the Agricultural Wage Gap
Author: Jorge Alvarez
Publisher: International Monetary Fund
Total Pages: 53
Release: 2017-12-22
Genre: Business & Economics
ISBN: 1484336364

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A key feature of developing economies is that wages in agriculture are significantly below those of other sectors. Using Brazilian household surveys and administrative panel data, I use information on workers who switch sectors to decompose the drivers of this gap. I find that most of the gap is explained by differences in worker composition. The evidence speaks against the existence of large short-term gains from reallocating workers out of agriculture and favors recently proposed Roy models of inter-sector sorting. A calibrated sorting model of structural transformation can account for the wage gap level observed and its decline as the economy transitioned out of agriculture.

Structural Transformation in Sub-Saharan Africa

Structural Transformation in Sub-Saharan Africa
Author: Ellen B. McCullough
Publisher:
Total Pages: 368
Release: 2017
Genre:
ISBN:

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In the first analytical chapter of this dissertation, I draw on a new set of nationally representative, internationally comparable household surveys, in order to provide an overview of key features of structural transformation -- labor allocation and labor productivity -- in four African economies. New, micro-based measures of sector labor allocation and cross-sector productivity differentials describe the incentives households face when allocating their labor. These measures are similar to national accounts-based measures that are typically used to characterize structural change. However, because agricultural workers supply far fewer hours of labor per year than do workers in other sectors in all of the countries analyzed, productivity gaps shrink by half, on average, when expressed on a per-hour basis. Underlying the productivity gaps that are prominently reflected in national accounts data are large employment gaps, which call into question the productivity gains that laborers can achieve through structural transformation. Furthermore, agriculture's continued relevance to structural change in Sub-Saharan Africa is highlighted by the strong linkages observed between rural non-farm activities and primary agricultural production. The process of economic development is characterized by rising output per agricultural worker and the exit of labor from agriculture to other sectors, which together result in rising incomes and falling incidence of poverty. In my second analytical chapter, I explore the relationship between labor productivity and the occupational choice that underlies the structural transformation process. I model households' decisions to participate in different activities -- farming, wage employment, and self employment -- through operation of a household non-farm enterprise. I estimate a structural, polytomous model of occupational choice using nationally representative household survey datasets from Tanzania, matched geospatially to several other relevant datasets. Then, I simulate the response of occupational choice to stylized productivity shocks to farming, wage employment, and self employment. I find that participation in farming is not responsive to productivity shocks of any sort. This is most likely because farming participation rates are already quite high. Wage and self employment participation do respond to wage and self employment productivity shocks, respectively. These results highlight the importance of investing in improved smallholder farmer productivity, especially along the intensive margins of farming participation and especially in places with low population density and poor market access, where farming productivity gains are the only ones to impact households. Investing in productivity-enhancing inputs is complicated by variability in rainfall, temperature, infrastructure, soils, and market access, which condition the economic returns to input use over space and time. Newly available, spatially explicit data in Sub-Saharan Africa allow decision makers to better understand how agricultural production and prices change with this variation in climate and growing conditions. In my third analytical paper, I, along with coauthors, develop an innovative, ex ante, spatially explicit profitability assessment to...

Economic Growth and Development

Economic Growth and Development
Author: Sibabrata Das
Publisher: Springer Nature
Total Pages: 444
Release:
Genre:
ISBN: 3031597281

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Structural Change and Income Differences

Structural Change and Income Differences
Author: Trevor Tombe
Publisher:
Total Pages: 224
Release: 2011
Genre:
ISBN: 9780494780534

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Economic growth and development is intimately related to the decline of agriculture's share of output and employment. This process of structural change has important implications for income and productivity differences between regions within a country or between countries themselves. Agriculture typically has low productivity relative to other sectors and this is particularly true in poor areas. So, as labour switches to nonagricultural activities or as agricultural productivity increases, poor agriculturally-intensive areas will benefit the most. In this thesis, I contribute to a recent and growing line of research and incorporate a separate role for agriculture, both into modeling frameworks and data analysis, to examine income and productivity differences.I first demonstrate that restrictions on trade in agricultural goods, which support inefficient domestic producers, inhibit structural change and lower productivity in poor countries. To do this, I incorporate multiple sectors, non-homothetic preferences, and labour mobility costs into an Eaton-Kortum trade model. With the model, I estimate productivity from trade data (avoiding problematic data for poor countries that typical estimates require) and perform a variety of counterfactual exercises. I find import barriers and labour mobility costs account for one-third of the aggregate labour productivity gap between rich and poor countries and for nearly half the gap in agriculture. Second, moving away from international income differences, I use a general equilibrium model of structural transformation to show a large labour migration cost between regions of the US magnifies the impact improved labour markets have on regional convergence. Finally, I estimate the influence of structural change on convergence between Canadian regions. I construct a unique dataset of census-division level wage and employment levels in both agriculture and nonagriculture between 1901 and 1981. I find convergence is primarily due to region-specific factors with structural change playing little role.

Gender and rural transformation

Gender and rural transformation
Author: Kosec, Katrina
Publisher: Intl Food Policy Res Inst
Total Pages: 6
Release: 2020-10-13
Genre: Political Science
ISBN:

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Rural transformation is central to the broader structural transformation process taking place in developing countries — fueled by the globalization of value chains, changing food systems, new technologies, conflict and displacement, and climate change, among other factors. Rural transformation refers to the process whereby rural economies diversify into nonfarm activities, agriculture becomes more capital-intensive and commercially oriented, and linkages with neighboring towns and cities grow and deepen (Berdegué, Rosada, and Bebbington 2014). It can bring about fundamental changes in the way businesses and households organize, such as the commercialization and diversification of agricultural production; increased agricultural productivity; migration; and the emergence of a broader set of rural livelihood activities.

A World Without Agriculture

A World Without Agriculture
Author: C. Peter Timmer
Publisher: A E I Press
Total Pages: 108
Release: 2009
Genre: Business & Economics
ISBN:

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This monograph, A World without Agriculture, was the 2007 Henry Wendt Lecture, delivered at the American Enterprise Institute (AEI) in Washington, D.C. on October 30, 2007. The Wendt Lecture is delivered annually by a scholar who has made major contributions to our understanding of the modern phenomenon of globalization and its consequences for social welfare, government policy, and the expansion of liberal political institutions.

Structural Transformation — How Does Thailand Compare?

Structural Transformation — How Does Thailand Compare?
Author: Mr.Vladimir Klyuev
Publisher: International Monetary Fund
Total Pages: 30
Release: 2015-03-04
Genre: Business & Economics
ISBN: 1498303692

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Thailand stands out in international comparison as a country with a high dispersion of productivity across sectors. It has especially low labor productivity in agriculture—a sector that employs a much larger share of the population than is typical for a country at Thailand’s level of income. This suggests large potential productivity gains from labor reallocation across sectors, but that process—which made a significant contribution to Thailand’s growth in the past—appears to have stalled lately. This paper establishes these facts and applies a simple model to discuss possible explanations. The reasons include a gap between the skills possessed by rural workers and those required in the modern sectors; the government’s price support programs for several agricultural commodities, particularly rice; and the uniform minimum wage. At the same time, agriculture plays a useful social and economic role as the employer of last resort. The paper makes a number of policy recommendations aimed at facilitating structural transformation in the Thai economy.