Rural structural change, poverty and income distribution: evidence from Peru
Insa Flachsbarth (),
Simone Schotte (),
Jann Lay () and
Alberto Garrido ()
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Insa Flachsbarth: University of Göttingen
Simone Schotte: GIGA Institut für Afrika-Studien
Jann Lay: GIGA Institut für Afrika-Studien
Alberto Garrido: E.T.S. Ingeniería Agronómica, Alimentaria y de Biosistemas
The Journal of Economic Inequality, 2018, vol. 16, issue 4, No 8, 653 pages
Abstract Some rural regions of Peru showed remarkable rates of poverty reduction and inequality reduction between 2004 and 2012, while others lagged behind. Using microsimulation-based decompositions, we analyse the driving forces behind these trends, finding that rural poverty and inequality reductions are mainly attributable to increasing labour incomes in Peru’s agricultural sector and, to a smaller extent, increasing public transfers. In earlier years, higher returns to experience drive these results, while in later years, increasing staple-crop yields and prices are of key importance. Further, remuneration of working hours increases in reaction to labour-supply shortages in rural areas. The accompanying rising incomes and non-agricultural job creation is less pro-poor than would be ideal, as they benefit more highly skilled workers. Further, shrinking farm sizes hampers poverty reduction and income-inequality reduction. Policies should target the participation of the poor in high-value (non-)agricultural activities, especially if positive trends in commodity prices are only transitory.
Keywords: Agriculture; Income distribution; Microsimulation-based decomposition; Peru; Rural poverty; Rural labour markets (search for similar items in EconPapers)
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