Agricultural Productivity, Hired Labor, Wages and Poverty: Evidence from Bangladesh

M. Shahe Emran and Forhad Shilpi

MPRA Paper from University Library of Munich, Germany

Abstract: This paper provides evidence on the effects of agricultural productivity on wage, labor supply to market oriented activities and labor allocation between own farming and wage labor in agriculture. To guide the empirical work, it develops a general equilibrium model that underscores the role of reallocation of family labor engaged in the production of non-marketed services at home (`home production'). The model predicts positive effects of a favorable agricultural productivity shock on wage and income, but the effect on hired labor is ambiguous; it depends on the strength of reallocation of labor from home to market production by labor surplus and deficit households. Taking rainfall variations as a measure of shock to agricultural productivity and using sub-district level panel data from Bangladesh, we find significant positive effects of a favorable rainfall shock on agricultural wage, labor supply to market work and per capita household expenditure. The share of hired labor in contrast declines substantially in response to a favorable productivity shock which is consistent with a case where labor-deficit households respond more than the labor-surplus ones in reallocating labor from home production.

Keywords: Agricultural Productivity; Home Production; Market Work; Wage; Hired Labor; Labor Supply Response; Poverty Agricultural Productivity; Home Production; Market Work; Wage; Hired Labor; Labor Supply Response; Poverty (search for similar items in EconPapers)
JEL-codes: J2 J3 O3 (search for similar items in EconPapers)
Date: 2014-08-23
New Economics Papers: this item is included in nep-agr, nep-dev and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/58099/1/MPRA_paper_58099.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/73974/1/MPRA_paper_73974.pdf revised version (application/pdf)

Related works:
Journal Article: Agricultural Productivity, Hired Labor, Wages, and Poverty: Evidence from Bangladesh (2018)
Working Paper: Agricultural productivity, hired labor, wages and poverty: evidence from Bangladesh (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:58099

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().