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The spatial division of labor in Nepal

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  • Fafchamps, Marcel
  • Shilpi, Forhad

Abstract

the authors examine how economic activity and market participation are distributed across space. Applying a nonparametric von Thunen model to Nepalese data, the authors uncover a strong spatial divisionof labor. Nonfarm employment is concentrated in and around cities, while agricultural wage employment dominates villages located further away. Vegetables are produced near urban centers. Paddy and commercial crops are more important at intermediate distances. Isolated villages revert to self-subsistence. The findings of the study are consistent with the von Thunen model of concentric specialization, corrected to account for city size. Spatial division of labor is closely related to factor endowments and household characteristics, especially at the local level.

Suggested Citation

  • Fafchamps, Marcel & Shilpi, Forhad, 2002. "The spatial division of labor in Nepal," Policy Research Working Paper Series 2845, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2845
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    Keywords

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    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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