Family Labour Supply Decisions in Rural Peru

Paul J. Gertler and John Newman
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Paul J. Gertler: Rand Corporation

Chapter 11 in Issues in Contemporary Economics, 1991, pp 284-318 from Palgrave Macmillan

Abstract: Abstract Raising rural incomes and increasing agricultural production are two of the primary challenges facing policy-makers in developing countries. While increasing agricultural production calls for policies that raise the return to agricultural activities, higher rural incomes could be achieved by raising both agricultural and non-agricultural returns. The resulting impacts on incomes and agricultural production depend heavily upon the family labour supply responses in both agricultural and non-agricultural activities. Because raising the return of one work activity relative to the other can induce a reallocation of labour between activities, both sectors must be considered jointly. For instance, if an increase in agricultural production comes at the expense of work in non-agricultural activities rather than leisure, the net effect on rural incomes may be negligible. If, at the same time, these policies result in a decline in agricultural output, then the cost of this decline needs to be considered in the evaluation of the policies.

Keywords: Marginal Return; Comparative Static Result; Family Consumption; Labour Supply Function; Labour Supply Equation (search for similar items in EconPapers)
Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-11576-1_11

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DOI: 10.1007/978-1-349-11576-1_11

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