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Human Capital, Entrereneurship, and Farm Household Earnings

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Author Info
Yang, Dennis T.
An, Mark Yuying

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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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Paper provided by Duke University, Department of Economics in its series Working Papers with number 97-03.

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Date of creation: 1997
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Handle: RePEc:duk:dukeec:97-03

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Find related papers by JEL classification:
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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  1. Satriawan, Elan & Swinton, Scott M., 2005. "Does Human Capital Raise Farm or Non-farm Earning More? New Insight from Rural Pakistan Panel Survey," 2005 Annual meeting, July 24-27, Providence, RI 19207, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  2. Justin van der Sluis & Mirjam van Praag & Wim Vijverberg, 2003. "Entrepreneurship Selection and Performance," Tinbergen Institute Discussion Papers 03-046/3, Tinbergen Institute, revised 24 Sep 2004. [Downloadable!]
  3. Jonasson, Erik & Helfand, Steven, 2008. "Locational Determinants of Rural Non-Agricultural Employment: Evidence from Brazil," Working Papers 2008:3, Lund University, Department of Economics. [Downloadable!]
  4. Dwayne Benjamin & Loren Brandt & Paul Glewwe & Li Guo, 2000. "Markets, Human Capital, and Inequality: Evidence from Rural China," Working Papers benjamin-00-01, University of Toronto, Department of Economics. [Downloadable!]
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  5. Takashi Kurosaki & Humayun Khan, 2004. "Effects of Human Capital on Farm and Non-Farm Productivity and Occupational Stratification in Rural Pakistan," Hi-Stat Discussion Paper Series d04-46, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
  6. Vandenbosch, Tom & Nanok, Tutui & Tollens, Eric, 2004. "The Role Of Relevant Basic Education In Achieving Food Security And Sustainable Rural Development," Working Papers 31843, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics. [Downloadable!]
  7. Maja Micevska, 2009. "Rural Nonfarm Employment and Incomes in the Himalayas," Working Papers id:2226, esocialsciences.com. [Downloadable!]
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