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The Agricultural Productivity Gap in Developing Countries

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  • Douglas Gollin

    (Williams College)

Abstract

According to national accounts data for developing countries, value added per worker is on average four times higher in the non-agriculture sector than in agriculture. Taken at face value this "agricultural productivity gap" suggests that labor is greatly misallocated across sectors in the developing world. In this paper we draw on new micro evidence to ask to what extent the gap is still present when better measures of inputs and outputs are taken into consideration. We find that even after considering sector differences in hours worked and human capital per worker, urban-rural cost-of-living differences, and alternative measures of sector income from household survey data, a puzzlingly large gap remains.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2012 Meeting Papers with number 510.

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Date of creation: 2012
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Handle: RePEc:red:sed012:510

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  1. David Lagakos & Benjamin Moll & Tommaso Porzio & Nancy Qian, 2012. "Experience Matters: Human Capital and Development Accounting," Working Papers 2012-021, Human Capital and Economic Opportunity Working Group.
  2. Francesco Caselli & James Feyrer, 2005. "The Marginal Product of Capital," NBER Working Papers 11551, National Bureau of Economic Research, Inc.
  3. Areendam Chanda & Carl-Johan Dalgaard, 2005. "Dual Economies and International Total Factory Productivity Differences," Macroeconomics 0507003, EconWPA.
  4. Jacoby, Hanan G. & Mansuri, Ghazala, 2007. "Incentives, supervision, and sharecropper productivity," Policy Research Working Paper Series 4125, The World Bank.
  5. Douglas Gollin & Stephen Parente & Richard Rogerson, 2002. "The Role of Agriculture in Development," Center for Development Economics 2002-09, Department of Economics, Williams College.
  6. Martin Ravallion & Shaohua Chen & Prem Sangraula, 2009. "Dollar a Day Revisited," World Bank Economic Review, World Bank Group, vol. 23(2), pages 163-184, June.
  7. Gharad Bryan & Shyamal Chowdhury & A. Mushfiq Mobarak, 2011. "Seasonal Migration and Risk Aversion," Working Papers id:4650, eSocialSciences.
  8. Todd Schoellman & Berthold Herrendorf, 2011. "Why is Agricultural Labor Productivity so Low in the United States?," 2011 Meeting Papers 1087, Society for Economic Dynamics.
  9. Akos Valentinyi & Berthold Herrendorf, 2008. "Measuring Factor Income Shares at the Sectoral Level," IEHAS Discussion Papers 0803, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  10. Restuccia, Diego & Yang, Dennis Tao & Zhu, Xiaodong, 2008. "Agriculture and aggregate productivity: A quantitative cross-country analysis," Journal of Monetary Economics, Elsevier, vol. 55(2), pages 234-250, March.
  11. Ilahi, Nadeem & Jafarey, Saqib, 1999. "Guestworker migration, remittances and the extended family: evidence from Pakistan," Journal of Development Economics, Elsevier, vol. 58(2), pages 485-512, April.
  12. Douglas Gollin, 2001. "Getting Income Shares Right," Department of Economics Working Papers 2001-11, Department of Economics, Williams College.
  13. Margaret S. McMillan & Dani Rodrik, 2011. "Globalization, Structural Change and Productivity Growth," NBER Working Papers 17143, National Bureau of Economic Research, Inc.
  14. Berthold Herrendorf & Ákos Valentinyi, 2012. "Which Sectors Make Poor Countries So Unproductive?," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 323-341, 04.
  15. Todd Schoellman, 2012. "Education Quality and Development Accounting," Review of Economic Studies, Oxford University Press, vol. 79(1), pages 388-417.
  16. David Lagakos & Michael E. Waugh, 2013. "Selection, Agriculture, and Cross-Country Productivity Differences," American Economic Review, American Economic Association, vol. 103(2), pages 948-80, April.
  17. Vollrath, Dietrich, 2009. "How important are dual economy effects for aggregate productivity?," Journal of Development Economics, Elsevier, vol. 88(2), pages 325-334, March.
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Cited by:
  1. Desmet, Klaus & Rossi-Hansberg, Esteban, 2012. "On the Spatial Economic Impact of Global Warming," CEPR Discussion Papers 9220, C.E.P.R. Discussion Papers.
  2. Tasso Adamopoulos & Diego Restuccia, 2013. "The Size Distribution of Farms and International Productivity Differences," Working Papers tecipa-494, University of Toronto, Department of Economics.
  3. Todd Schoellman & Berthold Herrendorf, 2011. "Why is Agricultural Labor Productivity so Low in the United States?," 2011 Meeting Papers 1087, Society for Economic Dynamics.
  4. Trevor Tombe, 2014. "The Missing Food Problem," Working Papers 2014-35, Department of Economics, University of Calgary, revised 10 Jun 2014.
  5. Karlygash Kuralbayeva, 2013. "Effects of carbon taxes in an economy with large informal sector and rural-urban migration," Grantham Research Institute on Climate Change and the Environment Working Papers 139, Grantham Research Institute on Climate Change and the Environment.
  6. Dietrich Vollrath, 2013. "The Efficiency of Human Capital Allocations in Developing Countries," Working Papers 201307956, Department of Economics, University of Houston.
  7. Wei Wang & Junmin Liao, 2013. "Financial Frictions and Agricultural Productivity Differences," 2013 Meeting Papers 1314, Society for Economic Dynamics.
  8. Gaaitzen J. de Vries & Abdul A. Erumban & Marcel P. Timmer & Ilya B. Voskoboynikov & Harry X. Wu, 2011. "Deconstructing The BRICs: Structural Transformation And Aggregate Productivity Growth," HSE Working papers WP BRP 04/EC/2011, National Research University Higher School of Economics.
  9. repec:fip:fedreq:y:2011:i:3q:p:329-357:n:vol.97no.3 is not listed on IDEAS
  10. Üngör, Murat, 2013. "De-agriculturalization as a result of productivity growth in agriculture," Economics Letters, Elsevier, vol. 119(2), pages 141-145.
  11. Brian McCaig & Nina Pavcnik, 2013. "Moving out of Agriculture: Structural Change in Vietnam," NBER Working Papers 19616, National Bureau of Economic Research, Inc.
  12. Todd Schoellman & Berthold Herrendorf, 2012. "Why is Measured Productivity so Low in Agriculture?," 2012 Meeting Papers 75, Society for Economic Dynamics.
  13. Diego Restuccia, 2011. "Recent developments in economic growth," Economic Quarterly, Federal Reserve Bank of Richmond, issue 3Q, pages 329-357.

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