Impact of Technological Changes and Economic Liberalization on Agricultural Labor Employment and Productivity

Egypt has passed dramatic economic changes over the last decades, under the economic reform liberalization program. The objectives of this study were to assess the impacts of such program on technological change, agricultural labor employment and Productivity. The study estimated two crop production functions for rice, the main summer crop, in two periods, before and after the economic reform application. Two sample survey data, over two successive periods were collected from the same region of East Nile Delta. Optimum allocation of inputs implied to decrease the human labor use, even though, under the shadow border price to reach a feasible employment opportunity for human labor. Whereas, the time series data, showed a decrease in agricultural labor employment by 30% over the last decades, results from the estimated production function model showed a 66% decrease in human labor employment was required to maximize the agricultural income. Liberalization of rice inputs and output prices accelerated the agricultural labor unemployment for mechanization Introducing the high yield crop varieties diminished the unemployment in agricultural labor due to expansion in mechanization packages. To maintain agriculture growing at an economic competitive performance a rural development programs should generate employment opportunities for the excess agriculture lahour, either in agricultural supporting industries or in non-agricultural small industries.