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Human capital, entrepreneurship, and farm household earnings

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  • Yang, Dennis Tao
  • An, Mark Yuying

Abstract

Farm households in modern environments engage in multiple productive activities. In this paper we formulate and estimate a profit maximization model in which human capital enhances earnings through both activity-specific effects and across-activity factor allocation. Our purpose is to decompose these contributions. The model is estimated using Chinese household data that contain detailed activity information. We find that schooling and experience improve the allocation of family-supplied inputs between agricultural and non-agricultural uses, counting for 46 percent of their total returns. The evidence suggests that studies ignoring activity choice could substantially undervalue the role of human capital in development.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 68 (2002)
Issue (Month): 1 (June)
Pages: 65-88

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Handle: RePEc:eee:deveco:v:68:y:2002:i:1:p:65-88

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  8. Schultz, T. Paul, 1988. "Education investments and returns," Handbook of Development Economics, Elsevier, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 13, pages 543-630 Elsevier.
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  15. Marcel Fafchamps & Agnes R. Quisumbing, . "Human Capital, Productivity, and Labor Allocation in Rural Pakistan," Working Papers, Stanford University, Department of Economics 97019, Stanford University, Department of Economics.
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  17. Phillips, Joseph M, 1994. "Farmer Education and Farmer Efficiency: A Meta-Analysis," Economic Development and Cultural Change, University of Chicago Press, vol. 43(1), pages 149-65, October.
  18. Behrman, Jere R. & Deolalikar, Anil B., 1988. "Health and nutrition," Handbook of Development Economics, Elsevier, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 14, pages 631-711 Elsevier.
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