Agricultural Employment, Wages and Poverty in Developing Countries

Katsushi Imai, Raghav Gaiha and Constanza Di Nucci
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Raghav Gaiha: Faculty of Management Studies, University of Delhi, India and Statistics and Studies for Development(SSD) Division, Strategy and Knowledge Management Department, International Fund for Agricultural Development (IFAD), Italy
Constanza Di Nucci: Faculty of Management Studies, University of Delhi, India and Statistics and Studies for Development(SSD) Division, Strategy and Knowledge Management Department, International Fund for Agricultural Development (IFAD), Italy

No DP2014-32, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: Drawing upon panel data estimations, we have analysed the relationships among agricultural productivity, employment, technology, openness of the economy, inequality in land distribution and poverty. First, we have identified a number of important factors affecting agricultural productivity, such as agricultural R&D expenditure, irrigation, fertilizer use, agricultural tractor/machinery use, reduction in inequality of land distributions, or reduction in gender inequality. Second, while agricultural wage rate is negatively associated with agricultural productivity and food price in levels, the growth in agricultural wage rate is positively correlated with the growth in agricultural land or labour productivity as well as with the growth in food price, particularly after 2000. Contrary to the ILO's (2012) claim that the gap has widened recently, this suggests the narrowing gap between wage and labour productivity once we focus on the conditional relationship between the two. Third, agricultural employment per hectare tends to increase agricultural productivity after taking account of the endogeneity of the former, while the growth in agricultural employment per hectare tends to increase the growth in non-agricultural employment over time with adjustment for endogeneity of the former. In this context, we have reviewed the recent literature and emphasised the importance of enhancing agricultural productivity and employment. Fourth, both agricultural growth and non-agricultural growth tend to lead to reduction in overall inequality. Finally, increase in agricultural productivity which is treated as endogenous will reduce poverty significantly through the overall economic growth. Overall, policies to increase agricultural productivity and agricultural employment are likely to increase non-agricultural growth, overall growth and reduce poverty, where guaranteeing gender inequality is likely to be one of the key factors.

JEL-codes: C20 I15 I39 O13 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2014-07
New Economics Papers: this item is included in nep-agr
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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2014-32.pdf First version, 2014 (application/pdf)

Related works:
Working Paper: Agricultural Employment, Wages and Poverty in Developing Countries (2014)
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