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The Agricultural Productivity Gap in Developing Countries

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  • Douglas Gollin
  • David Lagakos
  • Michael E. Waugh

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 agricultural productivity gap remains.

(This abstract was borrowed from another version of this item.)

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File URL: http://www.stern.nyu.edu/cons/groups/content/documents/webasset/con_034901.pdf
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Bibliographic Info

Paper provided by New York University, Leonard N. Stern School of Business, Department of Economics in its series Working Papers with number 11-14.

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Date of creation: 2011
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Handle: RePEc:ste:nystbu:11-14

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Postal: New York University, Leonard N. Stern School of Business, Department of Economics, 44 West 4th Street, New York, NY 10012-1126
Phone: (212) 998-0860
Fax: (212) 995-4218
Web page: http://w4.stern.nyu.edu/economics/
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References

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  1. Diego Restuccia & Dennis Tao Yang & Xiaodong Zhu, 2007. "Agriculture and Aggregate Productivity: A Quantitative Cross-Country Analysis," Working Papers e07-3, Virginia Polytechnic Institute and State University, Department of Economics.
  2. Gharad Bryan & Shyamal Chowdhury & A. Mushfiq Mobarak, 2011. "Seasonal Migration and Risk Aversion," Working Papers id:4650, eSocialSciences.
  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. David Lagakos & Benjamin Moll & Tommaso Porzio & Nancy Qian, 2012. "Experience Matters: Human Capital and Development Accounting," NBER Working Papers 18602, National Bureau of Economic Research, Inc.
  5. Douglas Gollin & Stephen Parente & Richard Rogerson, 2002. "The Role of Agriculture in Development," Department of Economics Working Papers 2002-09, Department of Economics, Williams College.
  6. Douglas Gollin, 2001. "Getting Income Shares Right," Department of Economics Working Papers 2001-11, Department of Economics, Williams College.
  7. Jacoby, Hanan G. & Mansuri, Ghazala, 2009. "Incentives, supervision, and sharecropper productivity," Journal of Development Economics, Elsevier, vol. 88(2), pages 232-241, March.
  8. Margaret S. McMillan & Dani Rodrik, 2011. "Globalization, Structural Change and Productivity Growth," NBER Working Papers 17143, National Bureau of Economic Research, Inc.
  9. 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.
  10. Francesco Caselli, 2007. "The Marginal Product of Capital," The Quarterly Journal of Economics, MIT Press, vol. 122(2), pages 535-568, 05.
  11. 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.
  12. 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.
  13. Areendam Chanda & Carl-Johan Dalgaard, 2003. "Dual Economies and International Total Factor Productivity Differences," Macroeconomics 0305002, EconWPA.
  14. Todd Schoellman, 2012. "Education Quality and Development Accounting," Review of Economic Studies, Oxford University Press, vol. 79(1), pages 388-417.
  15. 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.
  16. Vollrath, Dietrich, 2009. "How important are dual economy effects for aggregate productivity?," Journal of Development Economics, Elsevier, vol. 88(2), pages 325-334, March.
  17. 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.
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Citations

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Cited by:
  1. Tasso Adamopoulos & Diego Restuccia, 2013. "The Size Distribution of Farms and International Productivity Differences," Working Papers tecipa-494, University of Toronto, Department of Economics.
  2. Klaus Desmet & Esteban Rossi-Hansberg, 2012. "On the Spatial Economic Impact of Global Warming," NBER Working Papers 18546, National Bureau of Economic Research, Inc.
  3. Trevor Tombe, 2012. "The Missing Food Problem," Working Papers tt0060, Wilfrid Laurier University, Department of Economics, revised 2012.
  4. repec:fip:fedreq:y:2011:i:3q:p:329-357:n:vol.97no.3 is not listed on IDEAS
  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. 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.
  7. Vollrath, Dietrich, 2014. "The efficiency of human capital allocations in developing countries," Journal of Development Economics, Elsevier, vol. 108(C), pages 106-118.
  8. Wei Wang & Junmin Liao, 2013. "Financial Frictions and Agricultural Productivity Differences," 2013 Meeting Papers 1314, Society for Economic Dynamics.
  9. Üngör, Murat, 2013. "De-agriculturalization as a result of productivity growth in agriculture," Economics Letters, Elsevier, vol. 119(2), pages 141-145.
  10. Brian McCaig & Nina Pavcnik, 2013. "Moving out of Agriculture: Structural Change in Vietnam," NBER Working Papers 19616, National Bureau of Economic Research, Inc.
  11. Todd Schoellman & Berthold Herrendorf, 2012. "Why is Measured Productivity so Low in Agriculture?," 2012 Meeting Papers 75, Society for Economic Dynamics.
  12. Diego Restuccia, 2011. "Recent developments in economic growth," Economic Quarterly, Federal Reserve Bank of Richmond, issue 3Q, pages 329-357.
  13. Todd Schoellman & Berthold Herrendorf, 2011. "Why is Agricultural Labor Productivity so Low in the United States?," 2011 Meeting Papers 1087, Society for Economic Dynamics.

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