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The Role of Labor Markets and Human Capital in Poverty Reduction: Evidence from Asia and Africa

  • Keijiro X_Otsuka

    ()

    (National Graduate Institute for Policy Studies, Japan)

  • Jonna P. Estudillo

    ()

    (National Graduate Institute for Policy Studies, Japan)

  • Takashi Yamano

    ()

    (International Rice Research Institute (IRRI))

Using long-term panel data sets of rural households in the Philippines, Thailand, Bangladesh, and Tamil Nadu (India), a short-term panel data set in Mozambique, and cross-section data sets in Kenya, Uganda, and Ethiopia, the roles of labor markets in the long-term process of poverty reduction in Asia were examined in comparison with the current situation in Africa. There are three main findings. First, reliance on agricultural labor markets alone will not reduce poverty to a significant extent, in view of the declining share of agricultural wage income in Asia and its negligibly low level in Africa. Second, an increased non-farm income is a decisive factor in reducing rural poverty because it has become the major source of the rise in household income. Third, labor markets are clearly segmented in accordance with the schooling levels, where the younger and more educated children are engaged in lucrative non-farm labor employment in order to capture the high returns in schooling in this sector.

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Article provided by Southeast Asian Regional Center for Graduate Study and Research in Agriculture in its journal Asian Journal of Agriculture and Development.

Volume (Year): 7 (2010)
Issue (Month): 1 (June)
Pages: 23-40

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Handle: RePEc:sag:seajad:v:7:y:2010:i:1:p:23-40
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  1. Lanjouw, Jean O. & Lanjouw, Peter, 2001. "The rural non-farm sector: issues and evidence from developing countries," Agricultural Economics, Blackwell, vol. 26(1), pages 1-23, October.
  2. J. Estudillo & A. Quisumbing & K. Otsuka, 2001. "Gender Differences in Land Inheritance, Schooling and Lifetime Income: Evidence from the Rural Philippines," Journal of Development Studies, Taylor & Francis Journals, vol. 37(4), pages 23-48.
  3. Lanjouw, Peter & Stern, Nicholas, 1998. "Economic Development in Palanpur over Five Decades," OUP Catalogue, Oxford University Press, number 9780198288329, March.
  4. Takashi Kurosaki & Humayun Khan, 2006. "Human Capital, Productivity, and Stratification in Rural Pakistan," Review of Development Economics, Wiley Blackwell, vol. 10(1), pages 116-134, 02.
  5. Takahashi, Kazushi & Otsuka, Keijiro, 2007. "Human Capital Investment and Poverty Reduction over Generations: A Case from the Rural Philippines, 1979-2003," IDE Discussion Papers 96, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  6. Stefan Dercon & Pramila Krishnan, 2000. "Vulnerability, seasonality and poverty in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 25-53.
  7. Jayne, Thomas S. & Yamano, Takashi & Weber, Michael T. & Tschirley, David L. & Benfica, Rui M.S. & Chapoto, Antony & Zulu, Ballard & Neven, David, 2002. "Smallholder Income and Land Distribution in Africa: Implications for Poverty Reduction Strategies," Food Security International Development Policy Syntheses 11295, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  8. Estudillo, Jonna P & Otsuka, Keijiro, 1999. "Green Revolution, Human Capital, and Off-Farm Employment: Changing," Economic Development and Cultural Change, University of Chicago Press, vol. 47(3), pages 497-523, April.
  9. Otsuka, Keijiro & Place, Frank, 2001. "Land tenure and natural resource management," Food policy statements 34, International Food Policy Research Institute (IFPRI).
  10. Otsuka, Keijiro & Place, Frank (ed.), 2001. "Land tenure and natural resource management: A comparative study of agrarian communities in Asia and Africa," IFPRI books, International Food Policy Research Institute (IFPRI), number 0-8018-6747-9.
  11. Kei Kajisa, 2007. "Personal Networks and Nonagricultural Employment: The Case of a Farming Village in the Philippines," Economic Development and Cultural Change, University of Chicago Press, vol. 55, pages 669-707.
  12. Pauline Peters, 2006. "Rural income and poverty in a time of radical change in Malawi," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 322-345.
  13. Michelle Adato & Michael Carter & Julian May, 2006. "Exploring poverty traps and social exclusion in South Africa using qualitative and quantitative data," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 226-247.
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