Agriculture and Aggregate Productivity: A Quantitative Cross-Country Analysis

Diego Restuccia (), Dennis Tao Yang and Xiaodong Zhu ()

Working Papers from University of Toronto, Department of Economics

Abstract: A decomposition of aggregate labor productivity based on internationally comparable data from FAO and Penn World Tables reveals that high labor shares and low productivity in agriculture are mainly responsible for poor countries<92> current position in the world income distribution. Using a two-sector general equilibrium model, we argue that dierences in total factor productivity (TFP) and barriers to using modern intermediate inputs in agricultural production can largely account for the observed cross-country dierences in both the labor share and productivity in agriculture. Furthermore, our model with agriculture can account for 89% of the observed aggregate labor productivity dierences across countries, performing much better than a one-sector growth model with the same exogenous dierences in TFP.

Keywords: Agriculture; Land; Subsistence; Intermediate Input; Barriers; Productivity; International Comparisons. (search for similar items in EconPapers)
JEL-codes: O4 O1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-dev and nep-eff
Date: 2003-07-11
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Related works:
Working Paper: Agriculture and Aggregate Productivity: A Quantitative Cross-Country Analysis (2007)
Journal Article: Agriculture and aggregate productivity: A quantitative cross-country analysis (2008)
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