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The Labor Productivity Gap between the Agricultural and Nonagricultural Sectors, and Poverty and Inequality Reduction in Asia

Katsushi Imai (), Raghav Gaiha and Fabrizio Bresciani
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Raghav Gaiha: Honorary Professorial Research Fellow, Global Development Institute, University of Manchester, United Kingdom and Visiting Scholar, Population Studies Centre, University of Pennsylvania, United States
Fabrizio Bresciani: Lead Economist, Asia and the Pacific Division, International Fund for Agricultural Development, Italy. Author email: f.bresciani@ifad.org

Asian Development Review, 2019, vol. 36, issue 1, 112-135

Abstract: The objective of this paper is to examine how agricultural and nonagricultural labor productivities have grown over time and whether the growth pattern affected poverty in low- and middle-income economies in Asia. We first examine whether labor productivities in the agricultural and nonagricultural sectors have converged, finding evidence that they did not as the latter have grown faster. We then confirm that both agricultural and nonagricultural labor productivities have converged across economies and that the convergence effect is stronger for the nonagricultural sector. We have also observed that, despite the relatively slower growth in agricultural labor productivity, the agricultural sector played an important role in promoting nonagricultural labor productivity and thus in nonagricultural growth. Finally, we have found some evidence that the labor productivity gap reduces rural and urban poverty, as well as national-level inequality.

Keywords: agricultural labor productivity; Asia; inequality; labor productivity gap; poverty (search for similar items in EconPapers)
JEL-codes: C23 I32 J24 O13 (search for similar items in EconPapers)
Date: 2019
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