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Agricultural productivity and non-farm employment : evidence from Bangladesh

Author

Listed:
  • Shilpi,Forhad J.
  • Emran,Shahe
  • Shilpi,Forhad J.
  • Emran,Shahe

Abstract

This paper provides evidence on the impacts of agricultural productivity on employment growth and structural transformation of non-farm activities. To guide the empirical work, this paper develops a general equilibrium model that emphasizes distinctions among non-farm activities in terms of tradable-non-tradable and the formal-informal characteristics. The model shows that when a significant portion of village income is spent on town/urban goods, restricting empirical analysis to the village sample leads to underestimation of agriculture's role in employment growth and transformation of non-farm activities. Using rainfall as an instrument for agricultural productivity, empirical analysis finds a significant positive effect of agricultural productivity growth on growth of informal (small-scale) manufacturing and skilled services employment, mainly in education and health services. For formal employment, the effect of agricultural productivity growth on employment is found to be largest in the samples that include urban areas and rural towns compared with rural areas alone. Agricultural productivity growth is found to induce structural transformation within the services sector with employment in formal/skilled services growing at a faster pace than that of low skilled services.

Suggested Citation

  • Shilpi,Forhad J. & Emran,Shahe & Shilpi,Forhad J. & Emran,Shahe, 2016. "Agricultural productivity and non-farm employment : evidence from Bangladesh," Policy Research Working Paper Series 7685, The World Bank.
    • Handle: RePEc:wbk:wbrwps:7685
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    Citations

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    Cited by:

    1. Kazi Iqbal & Md Nahid Ferdous Pabon & Md Wahid Ferdous Ibon, 2023. "Examining rural income and employment in Bangladesh: A case of structural changes in the rural nonfarm sector in a developing country," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(3), pages 364-387, July.
    2. Muhammed Muqtada, 2018. "ALTERNATIVE APPROACHES TO FULL EMPLOYMENT IN BANGLADESH Role of the Non-farm Sector," CPD Working Paper 116, Centre for Policy Dialogue (CPD).
    3. Thomas Farole & Yoonyoung Cho & Laurent Bossavie & Reyes Aterido, 2017. "Bangladesh Jobs Diagnostic," World Bank Publications - Reports 28498, The World Bank Group.
    4. Adedoyin Mistura Rufai & Adebayo Isaiah Ogunniyi & Kabir Kayode Salman & Mutiat Bukola Salawu & Abiodun Olusola Omotayo, 2021. "Rural Transformation and Labor Market Outcomes among Rural Youths in Nigeria," Sustainability, MDPI, vol. 13(24), pages 1-18, December.

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