Selection and Absolute Advantage in Farming and Entrepreneurship

Francesco Amodio, Francisco Alvarez-Cuadrado () and Markus Poschke

No 14269, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Output per worker is lower in agriculture than in other sectors, and relatively more so in poor countries. Sorting of workers can explain this if comparative and absolute advantage in agriculture are positively correlated. We investigate this correlation using representative household-level panel data from four African countries. We exploit information on households who engage in both agriculture and non-farm entrepreneurship -- about 1/3 of the population. More productive farming households are more likely to pursue entrepreneurship, allocate more hours to it, and are more likely to enter over time. This implies that agricultural comparative and absolute advantage are negatively correlated.

Keywords: Agricultural productivity gap; Selection; entrepreneurship; Africa (search for similar items in EconPapers)
JEL-codes: J24 J31 J43 L26 O11 O13 O40 (search for similar items in EconPapers)
Date: 2020-01
New Economics Papers: this item is included in nep-agr, nep-eff and nep-ent
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Working Paper: Selection and Absolute Advantage in Farming and Entrepreneurship (2019)
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