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The Spatial Division of Labor in Nepal

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Author Info
Marcel Fafchamps
Forhad Shilpi, The World Bank

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Abstract

This paper examines how economic activity and market participation are distributed across space. Applying a non-parametric von Thünen model to Nepalese data, we uncover a strong spatial division of labor. Non-farm employment is heavily concentrated in and around cities while agricultural wage employment dominates villages located further away. Vegetable production take place primarily in the vicinity of urban centers while paddy and other commercial crops are more important at intermediate distances. Isolated villages revert to self-subsistence. These findings are consistent with the von Thünen model of concentric specialization, except that they also show the importance of city size. Spatial division of labor is closely related to asset and human capital accumulation, especially at the local level. We discuss the policy implications for road construction and the placement of rural development projects.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 044.

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Date of creation: 2000
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Handle: RePEc:oxf:wpaper:044

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Related research
Keywords: economic geography; market participation; spatial specialization;

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Find related papers by JEL classification:
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Fafchamps, Marcel & Shilpi, Forhad, 2006. "Subjective Welfare, Isolation and Relative Consumption," CEPR Discussion Papers 6002, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Gero Carletto & Katia Covarrubias & Benjamin Davis & Marika Krausova & Kostas Stamoulis & Paul Winters & Alberto Zezza, 2007. "Rural income generating activities in developing countries: re-assessing the evidence," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 4(1), pages 146-193. [Downloadable!]
  3. Marcel Fafchamps & Jackline Wahba, 2006. "Child Labor, Urban Proximity and Household Composition," IZA Discussion Papers 1966, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Reardon, Thomas & Pingali, Prabhu & Stamoulis, Kostas, 2006. "Impacts of Agrifood Market Transformation during Globalization on the Poor's Rural Nonfarm Employment: Lessons for Rural Business Development Programs," Staff Papers 11572, Michigan State University, Department of Agricultural, Food, and Resource Economics. [Downloadable!]
    Other versions:
  5. Shilpi, Forhad & Umali-Deininger, Dina, 2007. "Where to sell ? market facilities and agricultural marketing," Policy Research Working Paper Series 4455, The World Bank. [Downloadable!]
  6. Robert E. B. Lucas, 2000. "The Effects of Proximity and Transportation on Developing Country Population Migrations," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-111, Boston University - Department of Economics. [Downloadable!]
  7. Wang, Honglin & Dong, Xiaoxia & Huang, Jikun & Rozelle, Scott & Reardon, Thomas, 2006. "Producing and Procuring Horticultural Crops with Chinese Characteristics: Why Small Farmers Are Thriving and Supermarkets Are Absent in Rural China," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25762, International Association of Agricultural Economists. [Downloadable!]
  8. Pham, Hung T, 2006. "Rural Nonfarm Employment Under Trade Reform Evidence From Vietnam, 1993-2002," MPRA Paper 6476, University Library of Munich, Germany. [Downloadable!]
  9. Fafchamps, Marcel & Shilpi, Forhad, 2008. "Determinants of choice of migration destination," Policy Research Working Paper Series 4728, The World Bank. [Downloadable!]
  10. Fafchamps, Marcel & Shilpi, Forhad, 2006. "Isolation and Subjective Welfare," CEPR Discussion Papers 6001, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  11. Rijkers, Bob & Soderbom, Mans & Loening, Josef, 2009. "Mind the gap ? a rural-urban comparison of manufacturing firms," Policy Research Working Paper Series 4946, The World Bank. [Downloadable!]
  12. Jacoby, Hanan G. & Minten, Bart, 2008. "On measuring the benefits of lower transport costs," Policy Research Working Paper Series 4484, The World Bank. [Downloadable!]
    Other versions:
  13. Francisco de Hollanda Guimarães Ferreira & Peter Lanjouw, 2000. "Rural non-agricultural activities and poverty in the Brazilian northeast," Textos para discussão 428, Department of Economics PUC-Rio (Brazil). [Downloadable!]
  14. Paul Winters & Vera Chiodi, 2008. "Human capital investment and long-term poverty reduction in rural Mexico," PSE Working Papers 2008-51, PSE (Ecole normale supérieure). [Downloadable!]
  15. Davis, Benjamin & Covarrubias, Katia & Stamoulis, Kostas & Winters, Paul & Carletto, Gero & Quinones, Esteban & Zezza, Alberto & Digiuseppe, Stefania, 2007. "Rural Income Generating Activities: A Cross Country Comparison," 106th Seminar, October 25-27, 2007, Montpellier, France 7913, European Association of Agricultural Economists. [Downloadable!]
    Other versions:
    • Benjamin Davis & Paul Winters & Gero Carletto & Katia Covarrubias & Esteban Quinones & Alberto Zezza & Kostas Stamoulis & Genny Bonomi & Stefania DiGiuseppe, 2007. "Rural Income Generating Activities; A Cross Country Comparison," Working Papers 07-16, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA). [Downloadable!]
  16. Barrett, Christopher B. & Bezuneh, Mesfin & Clay, Daniel C. & Reardon, Thomas, 2001. "Heterogeneous Constraints, Incentives And Income Diversification Strategies In Rural Africa," Working Papers 14761, Cornell University, Department of Applied Economics and Management. [Downloadable!]
  17. Minten, Bart & Reardon, Thomas & Vandeplas, Anneleen, 2009. "Linking urban consumers and rural farmers in India: A comparison of traditional and modern food supply chains," IFPRI discussion papers 883, International Food Policy Research Institute (IFPRI). [Downloadable!]
  18. Lokshin, Michael & Bontch-Osmolovski, Mikhail & Glinskaya, Elena, 2007. "Work-related migration and poverty reduction in Nepal," Policy Research Working Paper Series 4231, The World Bank. [Downloadable!]
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