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

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  • Keijiro Otsuka

    () (National Graduate Institute for Policy Studies, Japan)

  • Jonna P. Estudillo

    () (National Graduate Institute for Policy Studies)

  • Takashi Yamano

    () (International Rice Research Institute)

Abstract

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.

Suggested Citation

  • Keijiro Otsuka & Jonna P. Estudillo & Takashi Yamano, 2010. "The Role of Labor Markets and Human Capital in Poverty Reduction: Evidence from Asia and Africa," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 7(1), pages 23-40, June.
  • Handle: RePEc:sag:seajad:v:7:y:2010:i:1:p:23-40
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    References listed on IDEAS

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    1. 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.
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    3. Jayne, T. S. & Yamano, Takashi & Weber, Michael T. & Tschirley, David & Benfica, Rui & Chapoto, Antony & Zulu, Ballard, 2003. "Smallholder income and land distribution in Africa: implications for poverty reduction strategies," Food Policy, Elsevier, vol. 28(3), pages 253-275, June.
    4. 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.
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    6. 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, February.
    7. 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.
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    9. 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.
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    Cited by:

    1. Muto, Megumi, 2009. "The impacts of mobile phone coverage expansion and personal networks on migration: evidence from Uganda," 2009 Conference, August 16-22, 2009, Beijing, China 51898, International Association of Agricultural Economists.
    2. Jonna P. Estudillo & Keijiro Otsuka & Saygnasak Seng-Arloun, "undated". "Pathways out of poverty in rural Laos," Working Papers e94, Tokyo Center for Economic Research.
    3. Keijiro Otsuka, 2012. "Economic Transformation of Agriculture in Asia: Past Performance and Future Prospects," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 9(1), pages 1-19, June.
    4. Otsuka, Keijiro, 2012. "Presidential Address at 27th International Conference of Agricultural Economists, Foz do IguaƧu, Brazil : Food Insecurity, Income Inequality, and the Changing Comparative Advantage in World Agricultur," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 127068, International Association of Agricultural Economists.

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