Agricultural Productivity Differences and Credit Market Imperfections
AbstractThis paper presents a simple model to examine the implication of credit market imperfections when considering the massive variation of agricultural labor productivity across countries. The development of credit markets enables more agents to acquire skills to work in non-agricultural sectors. The expansion of the sectors decreases the labor supply to agriculture as well as increases the supply of modern intermediate inputs to agriculture. Agricultural producers accordingly substitute the relatively cheap intermediate inputs for labor to produce a given level of an agricultural good, and, thereby, output per worker in agriculture is improved. Poor countries with less-developed credit markets are, therefore, far less productive in agriculture than rich countries with well-developed credit markets.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 38962.
Date of creation: 22 May 2012
Date of revision:
productivity; credit market imperfection; agriculture; skill acquisition; human capital investment; occupational choice;
Find related papers by JEL classification:
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
- NEP-AGR-2012-05-29 (Agricultural Economics)
- NEP-ALL-2012-05-29 (All new papers)
- NEP-EFF-2012-05-29 (Efficiency & Productivity)
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