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Why is Measured Productivity so Low in Agriculture?

Berthold Herrendorf () and Todd Schoellman ()

Review of Economic Dynamics, 2015, vol. 18, issue 4, 1003-1022

Abstract: In poor countries, labor productivity in agriculture is considerably lower than in the rest of the economy. We assess whether this well known fact implies that labor is mis-allocated between the two sectors. We make several observations that suggest otherwise. First, the same fact holds for US states where severe mis-allocation is implausible. Second, the gaps between the marginal value products of agriculture and non-agriculture are considerably smaller when measured through wages than through labor productivities. Third, labor productivity in agriculture is severely mis-measured in the US. (Copyright: Elsevier)

Keywords: Mis-allocation of labor; Productivity gaps; Wage gaps (search for similar items in EconPapers)
JEL-codes: O1 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1016/j.red.2014.10.006

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