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Agricultural Technology and Structural Change

  • Markus Eberhardt
  • Dietrich Vollrath

Using data for 128 countries we document low (high) elasticities of agricultural output with respect to labor in economies within temperate (tropical/highland) climate zones. Adopting a standard model of structural change we show that this technology heterogeneity determines the speed of structural transformation following changes in agricultural productivity and population size. Calibration exercises document shifts in sectoral labor allocation and living standards 2–3 times larger in temperate than in otherwise identical equatorial/highland regions for a given productivity shock. Eliminating technology heterogeneity can account for up to one-fifth of the observed differences in aggregate income per capita across countries.

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Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2014-21.

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Date of creation: 2014
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Handle: RePEc:csa:wpaper:2014-21
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