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Labour rationing of different farm types in Kazakhstan: A shadow price analysis

Katharina Vantomme

No 269557, Studies on the Agricultural and Food Sector in Transition Economies from Institute of Agricultural Development in Transition Economies (IAMO)

Abstract: After the breakdown of the Soviet Union many socioeconomic, but also demographic changes took place in Kazakhstan. The large collective farms have partly been broken up. The result was a tri-partitioned farm structure with agricultural enterprises including agroholdings, individual farms as well as household farms. Furthermore, a strong exodus especially from northern Kazakhstan took place, which included many skilled workers, leading to a scarcity of labour and to mismatches between skills offered and skills needed in agriculture. However, the potential of the Kazakh agriculture cannot be fully tapped without suitable labour. Thus, at present low productivity prevail. Therefore, a central term of the dissertation is the term "labour rationing". An agricultural unit is labour rationing if it is not able to find enough suitable workers even though it would be willing to pay a higher wage than the real wage. This dissertation focused on investigating labour rationing in the rural areas of Kazakhstan using two cross-sectional farm level data sets from 2003 and 2011 with data collected in the two oblasts, Akmola and Almaty. Besides, the production model under factor constraint was applied. From this model the shadow price analysis was derived with help of the Lagrangian method. Three Heckman models, for 2003, 2011 as well as for 2003 and 2011 together were estimated as well as the respective shadow prices of the different farm types. The latter were then compared with the real wages. All farm types faced an excess demand for labour. However, agroholdings suffered from the strongest labour rationing and thus, had most problem finding suitable workers, skilled workers in particular. Regarding the reasons for labour rationing, the analysis suggests mainly the following: * In 2011, agricultural producers that carried out joint activity with other agricultural units were less likely to be labour rationed than those that did not carry out any joint activity together with others. * Agricultural units with a peripheral and poorly connected location were more likely to be rationed on the labour market. Moreover, in Akmola oblast labour shortages were more severe than in Almaty oblast. * Regarding the value of machinery and movable equipment, it can be said that these factors normally rather attract workers, especially in Kazakhstan. However, in order to operate more sophisticated machinery more skills are needed. But skilled workers were particularly scarce. * Regarding education it cannot be clearly observed that more educated managers have fewer problems or more problems finding workers in Kazakhstan. Finally, it can be said that according to the data wages in agriculture in Kazakhstan did rise if 2003 and 2011 are compared, but so did the shadow wages. Thus, an excess demand for labour and the problem of labour rationing persist. Nevertheless, it seems that the labour productivity increased which might be due to investments in machinery. At the same time this means that especially skilled workers are in demand.

Keywords: Demand and Price Analysis; Labor and Human Capital (search for similar items in EconPapers)
Pages: 122
Date: 2017-12-18
New Economics Papers: this item is included in nep-agr and nep-cwa
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DOI: 10.22004/ag.econ.269557

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