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Global Value Chains, Large-Scale Farming, and Poverty: Long-Term Effects in Senegal

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  • Goedele Van den Broeck
  • Johan Swinnen
  • Miet Maertens

Abstract

This paper is the first to present panel data evidence on the longer-term impact of expansion of global value chains and large-scale export-oriented farms in developing countries. Using panel data from two survey rounds covering a seven-year period and fixed effects regression, we estimate the longer-term income effects of wage employment on large-scale farms in the rapidly expanding horticultural export sector in Senegal. In addition to estimating average income effects, we estimate heterogeneous income effects using fixed effects quantile regression. We find that poverty and inequality reduced much faster in the research area than elsewhere in Senegal. Employment in the horticultural export sector significantly increases household income and the income effect is strongest for the poorest households. Expansion of the horticultural export sector in Senegal has been particularly pro-poor through creating employment that is accessible and creates substantial income gains for the poorest half of the rural population. These pro-poor employment effects contrast with insights in the literature on increased inequality from rural wage employment.

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  • Goedele Van den Broeck & Johan Swinnen & Miet Maertens, 2016. "Global Value Chains, Large-Scale Farming, and Poverty: Long-Term Effects in Senegal," LICOS Discussion Papers 38016, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:38016
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    1. repec:eee:wdevel:v:99:y:2017:i:c:p:95-109 is not listed on IDEAS
    2. Van Hoyweghen, K. & Van Den Broeck, G. & Maertens, M., 2018. "Understanding the importance of off-farm employment for rural development: Evidence from Senegal," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275888, International Association of Agricultural Economists.
    3. Van Den Broeck, G & Van Hoyweghen, K & Maertens, M, 2017. "Horticultural exports and food security in Senegal," Working Papers 258322, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    4. Jean-Christophe Bureau & Thorsten Rogall, 2017. "EU Policies and Global Food Security," LICOS Discussion Papers 39217, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    5. SUZUKI, Aya & MANO, Yukichi & ABEBE, Girum, 2017. "Earnings, Savings, and Job Satisfaction in a Labor-intensive Export Sector: Evidence from the Cut Flower Industry in Ethiopia," Discussion paper series HIAS-E-55, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.

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    Keywords

    Globalisation; High-value supply chains; Rural wage employment; Quantile regression; Panel data; Long-term effects;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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