An empirical investigation of short and long-run agricultural wage formation in Ghana

Awudu Abdulai and Christopher L. Delgado

No 37, MTID discussion papers from International Food Policy Research Institute (IFPRI)

Abstract: This paper investigates empirically the factors that influence real agricultural wage rates in Ghana, based on 1957 to 1991 data. The Johansen cointegration framework is used to examine long-run relationships among agricultural and urban wage rates, the domestic terms of trade between agriculture and non-agriculture, urban unemployment, capital stock in agriculture and the size of the rural population. An error correction model is then used to investigate short-run dynamic relationships among the variables. The results show that: (1) there is only one stable equilibrium relationship among agricultural wage rates and their determinants in the long-run; (2) a 1 percent change in the domestic terms of trade between agriculture and non-agriculture leads to a 0.48 percent change in the real agricultural wage rate in the short-run and a 0.83 percent change in the long run; (3) the analysis suggests a one-time and one way upwards structural shift of 3.6 percent in real agricultural wages during the 1980s.

Keywords: Income Ghana.; Agriculture Economic aspects Ghana. (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: An Empirical Investigation of Short- and Long-run Agricultural Wage Formation in Ghana (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:fpr:mtiddp:37

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