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An Empirical Investigation of Short- and Long-run Agricultural Wage Formation in Ghana

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  • Awudu Abdulai
  • Christopher Delgado

Abstract

This paper investigates the factors that influence real agricultural wage rates in Ghana, a critical issue in that country for promoting successful macroeconomic adjustment to structural changes in incentives. It is based on 1957-91 data. The Johansen cointegration framework is used to quantify and to examine the stability following major shocks of new long-run relationships among agricultural and urban wage rates, the domestic terms of trade between agriculture and non-agriculture, urban unemployment, capital stock in agriculture and the size of the rural population. An error correction model is then used to investigate short-run dynamic relationships among the variables. Results show that: (1) there is only one stable equilibrium relationship among agricultural wage rates and their determinants in the long run; (2) a 1% change in the domestic terms of trade between agriculture and non-agriculture leads to a 0.48% change in the real agricultural wage rate in the short run and a 0.83% change in the long run; and (3) the analysis suggests a one-time and one-way upwards structural shift of 3.6% in real agricultural wages during the 1980s.

Suggested Citation

  • Awudu Abdulai & Christopher Delgado, 2000. "An Empirical Investigation of Short- and Long-run Agricultural Wage Formation in Ghana," Oxford Development Studies, Taylor & Francis Journals, vol. 28(2), pages 169-185.
  • Handle: RePEc:taf:oxdevs:v:28:y:2000:i:2:p:169-185 DOI: 10.1080/713688312
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    Cited by:

    1. Rashid, Shahidur & Sharma, Manohar & Zeller, Manfred, 2002. "Micro-lending for small farmers in Bangladesh," MTID discussion papers 45, International Food Policy Research Institute (IFPRI).
    2. Dorosh, Paul A. & Shahabuddin, Quazi, 2002. "Rice price stabilization in Bangladesh," MSSD discussion papers 46, International Food Policy Research Institute (IFPRI).
    3. Nicholas Minot & Lisa Daniels, 2005. "Impact of global cotton markets on rural poverty in Benin," Agricultural Economics, International Association of Agricultural Economists, pages 453-466.
    4. Shahabuddin, Quazi & Dorosh, Paul A., 2002. "Comparative advantage in Bangladesh crop production," MTID discussion papers 47, International Food Policy Research Institute (IFPRI).
    5. Luc Christiaensen & Lionel Demery & Stefano Paternostro, 2002. "Growth, Distribution, and Poverty in Africa : Messages from the 1990s," World Bank Publications, The World Bank, number 15215.
    6. Gulati, Ashok & Narayanan, Sudha, 2002. "Rice trade liberalization and poverty," MTID discussion papers 51, International Food Policy Research Institute (IFPRI).
    7. Klugman, Jeni & Loening, Josef, 2007. "Welfare Impacts of Food Price Inflation in Ethiopia," MPRA Paper 24892, University Library of Munich, Germany.
    8. Gabre-Madhin, Eleni Z. & Haggblade, Steven, 2003. "Successes in African agriculture," MSSD discussion papers 53, International Food Policy Research Institute (IFPRI).
    9. Shahidur Rashid, 2004. "Spatial Integration of Maize Markets in Post-liberalised Uganda," Journal of African Economies, Centre for the Study of African Economies (CSAE), pages 102-133.
    10. Delgado, Christopher L. & Rosegrant, Mark W. & Wada, Nikolas & Meijer, Siet & Ahmed, Mahfuzuddin, 2002. "Fish as food," MTID discussion papers 52, International Food Policy Research Institute (IFPRI).
      • Delgado, Christopher L. & Rosegrant, Mark W. & Wada, Nikolas & Meijer, Siet & Ahmed, Mahfuzuddin, 2002. "Fish as food," MSSD discussion papers 52, International Food Policy Research Institute (IFPRI).
    11. Christiaensen, Luc & Demery, Lionel & Paternostro, Stefano, 2003. "Reforms, Remoteness and Risk in Africa: Understanding Inequality and Poverty during the 1990s," WIDER Working Paper Series 070, World Institute for Development Economic Research (UNU-WIDER).

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