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Factor endowments, wage growth, and changing food self-sufficiency: Evidence from country-level panel data

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  • Otsuka, Keijiro
  • Liu, Yanyan
  • Yamauchi, Futoshi

Abstract

Asian countries have witnessed a sharp increase in real wage as a result of rapid economic growth and structural transformation in recent years. Using a country level panel data from 1980 to 2010, this paper examines the effects of real wage increase on Asian agriculture that traditionally used family labor intensively on small farms. The empirical evidence supports our hypothesis that an increase in real wages, along with absorptions of labor into nonagricultural sectors, has been inducing the substitution of labor by machines in agriculture. However, this process is less successful in the countries that are constrained by their small operational land sizes, resulting in lowered land productivity. We also demonstrated that dynamic changes in yield are an important determinant of food self-sufficiency ratio.

Suggested Citation

  • Otsuka, Keijiro & Liu, Yanyan & Yamauchi, Futoshi, 2013. "Factor endowments, wage growth, and changing food self-sufficiency: Evidence from country-level panel data," IFPRI discussion papers 1246, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:1246
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    1. Dwayne Benjamin & Loren Brandt, 2002. "Property rights, labour markets, and efficiency in a transition economy: the case of rural China," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 689-716, November.
    2. Keijiro Otsuka, 2013. "Food insecurity, income inequality, and the changing comparative advantage in world agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 44(s1), pages 7-18, November.
    3. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
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