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Refugee inflows, surplus farm labor, and crop marketization in rural Africa

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  • Tsuda, Shunsuke

Abstract

This paper sheds light on the structure of factor and output market frictions to investigate long-term effects of refugee inflows on host farmers. Combining a canonical agricultural household model, the natural experimental setting of mass refugee inflows into Tanzania in the early 1990s, and longitudinal panel data from the host economy, I show that refugee inflows cause market-specific gains and losses. Refugee inflows tighten the off-farm labor market participation constraint, implying an increase in surplus farm labor and labor market inefficiency. On the other hand, I observe a positive impact on the transition from subsistence to crop marketization. This transition is revealed to be primarily due to a reduction in fixed transaction costs around refugee camps, not due to an increase in consumption demand by refugees. While the overall impact on agricultural labor productivity is negative, the “surplus farm labor effect” and the “crop marketization effect” act in opposite directions.

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  • Tsuda, Shunsuke, 2022. "Refugee inflows, surplus farm labor, and crop marketization in rural Africa," Journal of Development Economics, Elsevier, vol. 155(C).
    • Handle: RePEc:eee:deveco:v:155:y:2022:i:c:s0304387821001607
    DOI: 10.1016/j.jdeveco.2021.102805
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    2. Henrique, 2024. "The Power of Dialogue: Forced Displacement and Social Integration amid an Islamist Insurgency in Mozambique," HiCN Working Papers 405, Households in Conflict Network.
    3. Rama Dasi Mariani & Furio Camillo Rosati & Pasquale Scaramozzino & Marco d'Errico, 2023. "Gains from Variety: Refugee-Host Interactions in Uganda," CEIS Research Paper 553, Tor Vergata University, CEIS, revised 23 Feb 2023.

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    More about this item

    Keywords

    Refugees; Host economies; Agricultural household models; Market transaction costs; Food aid; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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