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Economic Development and the Decline of Agricultural Employment

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  • Foster, Andrew D.
  • Rosenzweig, Mark R.

Abstract

This chapter considers the linkages between agricultural development and rural non-farm activities. The chapter is motivated by growing evidence that non-farm activities provide an increasingly important share of rural incomes in many low-income questions, questions about whether increasing agricultural productivity is a necessary precondition for raising incomes and reducing poverty in rural areas, and increased evidence of factor and commodity flows between rural and urban areas. Unfortunately, the existing literature is sparse and has not been sufficiently attentive to the underlying structures and mechanisms that drive the relationship between agricultural productivity and rural non-farm change. A particular weakness of this literature is the lack of attention given to the importance of flows of both capital and labor. The reason for this is in part due to the limitations of existing data. An assessment of the strengths and weaknesses of existing data sets is thus also provided, with particular attention to panel data sets that might be useful for assessing the extent of geographic mobility. In order to clarify the relevant issues the Chapter presents a model of the rural economy that permits examination of the linkages between agricultural development and non-farm employment under different regimes distinguished by the mobility of capita and labor. Basic features of the model are then tested using newly available data from South Asia. The Chapter concludes with suggestions for future data collection efforts as well as the development of more sophisticated models of the rural economy.

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Bibliographic Info

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This chapter was published in:

  • T. Paul Schultz & John A. Strauss (ed.), 2008. "Handbook of Development Economics," Handbook of Development Economics, Elsevier, edition 1, volume 4, number 5, January.
    This item is provided by Elsevier in its series Handbook of Development Economics with number 5-47.

    Handle: RePEc:eee:devchp:5-47

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    Web page: http://www.elsevier.com/wps/find/bookseriesdescription.cws_home/BS_HE/description

    Related research

    Keywords: non-farm; rural; migration; development;

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    References

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    1. Ranis, Gustav & Stewart, Frances, 1993. "Rural nonagricultural activities in development : Theory and application," Journal of Development Economics, Elsevier, vol. 40(1), pages 75-101, February.
    2. Lanjouw, Jean O. & Lanjouw, Peter, 2001. "The rural non-farm sector: issues and evidence from developing countries," Agricultural Economics, Blackwell, vol. 26(1), pages 1-23, October.
    3. Rosenzweig, Mark R & Stark, Oded, 1989. "Consumption Smoothing, Migration, and Marriage: Evidence from Rural India," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 905-26, August.
    4. John Fitzgerald & Peter Gottschalk & Robert Moffitt, 1998. "An Analysis of Sample Attrition in Panel Data: The Michigan Panel Study of Income Dynamics," NBER Technical Working Papers 0220, National Bureau of Economic Research, Inc.
    5. Joyce J. Chen, 2006. "Migration and Imperfect Monitoring: Implications for Intra-Household Allocation," American Economic Review, American Economic Association, vol. 96(2), pages 227-231, May.
    6. Foster, Andrew D & Rosenzweig, Mark R, 2002. "Household Division and Rural Economic Growth," Review of Economic Studies, Wiley Blackwell, vol. 69(4), pages 839-69, October.
    7. Syrquin, Moshe, 1988. "Patterns of structural change," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 7, pages 203-273 Elsevier.
    8. Townsend, Robert M, 1994. "Risk and Insurance in Village India," Econometrica, Econometric Society, vol. 62(3), pages 539-91, May.
    9. Alderman, Harold & Watkins, Susan Cotts & Kohler, Hans-Peter & Maluccio, John A. & Behrman, Jere R., 2000. "Attrition in longitudinal household survey data," FCND briefs 96, International Food Policy Research Institute (IFPRI).
    10. Ravallion, Martin & Datt, Gaurav, 1996. "How Important to India's Poor Is the Sectoral Composition of Economic Growth?," World Bank Economic Review, World Bank Group, vol. 10(1), pages 1-25, January.
    11. Ravallion, Martin & Datt, Gaurav, 1999. "When is growth pro-poor? Evidence from the diverse experiences of India's states," Policy Research Working Paper Series 2263, The World Bank.
    12. Duncan Thomas & Elizabeth Frankenberg & James P. Smith, 2004. "Lost but Not Forgotten: Attrition and Follow-up in the Indonesia Family Life Survey," Labor and Demography 0408007, EconWPA.
    13. Mark R. Rosenzweig, 2003. "Payoffs from Panels in Low-Income Countries: Economic Development and Economic Mobility," American Economic Review, American Economic Association, vol. 93(2), pages 112-117, May.
    14. Thomas, D. & Frankenberg, E. & Smith, J.P., 2000. "Lost But Not Forgotten Attribution and Follow-up in the Indonesian Family Life Survey," Papers 00-03, RAND - Labor and Population Program.
    15. Mellor, John W & Johnston, Bruce F, 1984. "The World Food Equation: Interrelations among Development, Employment, and Food Consumption," Journal of Economic Literature, American Economic Association, vol. 22(2), pages 531-74, June.
    16. Haggblade, Steven & Hazell, P. B. R. & Reardon, Thomas, 2002. "Strategies for stimulating poverty-alleviating growth in the rural nonfarm economy in developing countries:," EPTD discussion papers 92, International Food Policy Research Institute (IFPRI).
    17. D. Gale Johnson, 2000. "Population, Food, and Knowledge," American Economic Review, American Economic Association, vol. 90(1), pages 1-14, March.
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    Cited by:
    1. Xing, Chunbing, 2010. "Migration, Self-Selection, and Income Distributions: Evidence from Rural and Urban China," IZA Discussion Papers 4979, Institute for the Study of Labor (IZA).
    2. Guy Michaels & Ferdinand Rauch & Stephen Redding, 2008. "Urbanisation and Structural Transformation," CEP Discussion Papers dp0892, Centre for Economic Performance, LSE.
    3. Banerjee, Abhijit & Duflo, Esther, 2007. "What is Middle Class about the Middle Classes Around the World?," CEPR Discussion Papers 6613, C.E.P.R. Discussion Papers.
    4. Fuwa, Nobuhiko & Balisacan, Arsenio M. & Mapa, Dennis & Abad Santos, Carlos & Piza, Sharon Faye, 2012. "Sectoral Growth Linkages and the Role of Infrastructure Development: Revisiting the sources of nonfarm development in the rural Philippines," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126456, International Association of Agricultural Economists.
    5. Jonasson, Erik & Helfand, Steven M., 2010. "How Important are Locational Characteristics for Rural Non-agricultural Employment? Lessons from Brazil," World Development, Elsevier, vol. 38(5), pages 727-741, May.
    6. Mueller, Valerie & Shariff, Abusaleh, 2009. "Preliminary evidence on internal migration, remittances, and teen schooling in India:," IFPRI discussion papers 858, International Food Policy Research Institute (IFPRI).
    7. Akresh, Richard & Edmonds, Eric V., 2010. "The Analytical Returns to Measuring a Detailed Household Roster," IZA Discussion Papers 4759, Institute for the Study of Labor (IZA).

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