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A Dynamic Econometric Model of Agricultural Wage Determination in Bangladesh

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  • Boyce, James K
  • Ravallion, Martin

Abstract

Econometric evidence on the evolution of real agricultural wages in Bangladesh over time has been used by some observers to argue that higher relative prices of food staples and higher agricultural productivity will help the rural poor. The authors re-examine this hypothesis using new data and a dynamic econometric model of wage determination. The model's specification avoids a number of shortcomings in past work, and the estimated equation gives a good yet parsimonious fit to annual data. Increases in rice prices relative to the prices of manufactured goods are found to have adverse effects on the real wages in terms of rice in both the short and long-run though there is full indexation relative to a bundle of goods in the long-run. On correcting for likely measurement errors in the official series, they find no evidence that changes in agricultural productivity have had a significant effect on real wage rates. Copyright 1991 by Blackwell Publishing Ltd

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Bibliographic Info

Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics & Statistics.

Volume (Year): 53 (1991)
Issue (Month): 4 (November)
Pages: 361-76

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Handle: RePEc:bla:obuest:v:53:y:1991:i:4:p:361-76

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Cited by:
  1. Banerjee, Lopamudra, 2007. "Effect of Flood on Agricultural Wages in Bangladesh: An Empirical Analysis," World Development, Elsevier, vol. 35(11), pages 1989-2009, November.
  2. Rashid, Shahidur, 2002. "Dynamics of agricultural wage and rice price in Bangladesh," MSSD discussion papers 44, International Food Policy Research Institute (IFPRI).
  3. Nouve, Kofi & Wodon, Quentin, 2008. "Impact of rising rice prices and policy responses in Mali : simulations with a dynamic CGE model," Policy Research Working Paper Series 4739, The World Bank.
  4. Wheatley, W. Parker & Liu, Donald J. & del Ninno, Carlo, 2001. "Empirical Analysis Of Hysteresis In Rural Labor Markets In A Developing Country: The Case Of Bangladesh," 2001 Annual meeting, August 5-8, Chicago, IL 20594, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Datt, Gaurav & Ravallion, Martin, 1998. "Farm productivity and rural poverty in India," FCND discussion papers 42, International Food Policy Research Institute (IFPRI).
  6. Sumiter Broca, 2002. "Food Insecurity, Poverty and Agriculture: A Concept Paper," Working Papers 02-15, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
  7. World Bank, 2010. "Food Price Increases in South Asia : National Responses and Regional Dimensions," World Bank Other Operational Studies 2885, The World Bank.
  8. Datt, Gaurav & Olmsted, Jennifer, 1998. "Agricultural wages and food prices in Egypt," FCND discussion papers 53, International Food Policy Research Institute (IFPRI).
  9. Jacoby, Hanan G., 2013. "Food prices, wages, and welfare in rural India," Policy Research Working Paper Series 6412, The World Bank.

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