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Can labor market imperfections explain changes in the inverse farm size?productivity relationship ? longitudinal evidence from rural India

Author

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  • Deininger,Klaus W.
  • Jin,Songqing
  • Liu,Yanyan
  • Singh,Sudhir K.

Abstract

A large national farm panel from India covering a quarter century (1982, 1999, and 2008) is used to show that the inverse farm size-yield relationship weakened significantly over time, despite an increase in the dispersion of farm sizes. Key reasons are substitution of capital for labor in response to nonagricultural labor demand. Family labor was more efficient than hired labor in 1982-99, but not in 1999?2008. In line with labor market imperfections as a key factor, separability of labor supply and demand decisions cannot be rejected in the second period, except in villages with very low nonagricultural labor demand.

Suggested Citation

  • Deininger,Klaus W. & Jin,Songqing & Liu,Yanyan & Singh,Sudhir K., 2016. "Can labor market imperfections explain changes in the inverse farm size?productivity relationship ? longitudinal evidence from rural India," Policy Research Working Paper Series 7783, The World Bank.
    • Handle: RePEc:wbk:wbrwps:7783
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    Cited by:

    1. Yao, Ling & Chen, Qihui & Wu, Laping, "undated". "Heterogeneous supply response: Does high price expectation attenuate the inverse farm size-productivity relationship in China?," 2018 Annual Meeting, August 5-7, Washington, D.C. 274363, Agricultural and Applied Economics Association.
    2. Ayala Wineman & Thomas S. Jayne, 2021. "Factor Market Activity and the Inverse Farm Size-Productivity Relationship in Tanzania," Journal of Development Studies, Taylor & Francis Journals, vol. 57(3), pages 443-464, March.
    3. Hassan, Md. Fuad & Kornher, Lukas, 2020. "Is mechanization in agriculture curse or blessing for the rural labor market in Bangladesh?," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304543, Agricultural and Applied Economics Association.
    4. Taylor, Matthew P.H. & Helfand, Steven M., 2021. "The Farm Size – Productivity Relationship in the Wake of Market Reform: An Analysis of Mexican Family Farms," 2021 Conference, August 17-31, 2021, Virtual 315138, International Association of Agricultural Economists.
    5. Pacheco de Castro Flores Ribeiro, Paulo & Osório de Barros de Lima e Santos, José Manuel & Prudêncio Rafael Canadas, Maria João & Contente de Vinha Novais, Ana Maria & Ribeiro Ferraria Moreira, Franci, 2021. "Explaining farming systems spatial patterns: A farm-level choice model based on socioeconomic and biophysical drivers," Agricultural Systems, Elsevier, vol. 191(C).
    6. Thottappilly, Anna, 2021. "Identifying the Income Effect on Nutrition for Agricultural Households: Separability of Production and Consumption," 2021 Conference, August 17-31, 2021, Virtual 315335, International Association of Agricultural Economists.
    7. Liu, Yanyan & Barrett, Christopher B. & Pham, Trinh & Violette, William, 2020. "The intertemporal evolution of agriculture and labor over a rapid structural transformation: Lessons from Vietnam," Food Policy, Elsevier, vol. 94(C).
    8. Klaus W. Deininger & Thea Hilhorst & Zevenbergen,Jaap & Nkurunziza,Emmanuel, 2025. "Capitalizing on Digital Transformation to Enhance the Effectiveness of Property Institutions : Conceptual Background and Evidence from 85 Countries," Policy Research Working Paper Series 11100, The World Bank.
    9. Fang Xia & Lingling Hou & Songqing Jin & Dongqing Li, 2020. "Land size and productivity in the livestock sector: evidence from pastoral areas in China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 867-888, July.
    10. Keijiro Otsuka, 2021. "Changing Relationship between Farm Size and Productivity and Its Implications for Philippine Agriculture," Discussion Papers 2102, Graduate School of Economics, Kobe University.
    11. Steven Helfand & Matthew Taylor, 2018. "The Inverse Relationship between Farm Size and Productivity: Refocusing the Debate," Working Papers 201811, University of California at Riverside, Department of Economics.
    12. Rada, Nicholas E. & Fuglie, Keith O., 2019. "New perspectives on farm size and productivity," Food Policy, Elsevier, vol. 84(C), pages 147-152.
    13. Takada, Jun & Shuto, Hisato, 2023. "Causal linkages between land reform and factor demand under tenure insecurity: Evidence from Amhara Region, Ethiopia," Land Use Policy, Elsevier, vol. 128(C).
    14. S. Mahendra Dev, 2018. "Tranformation of Indian agriculture: Growth, iclusiveness and sustainability," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2018-026, Indira Gandhi Institute of Development Research, Mumbai, India.
    15. RASHID, Furaha Ndakije, . "Is Increasing Input Use For Rice Production A Profitable Proposition In Tanzania?," Review of Agricultural and Applied Economics (RAAE), Faculty of Economics and Management, Slovak Agricultural University in Nitra, vol. 23(2).
    16. Hailemariam Ayalew & Jordan Chamberlin & Carol Newman & Kibrom A. Abay & Frederic Kosmowski & Tesfaye Sida, 2024. "Revisiting the size–productivity relationship with imperfect measures of production and plot size," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(2), pages 595-619, March.
    17. Shruti Rajagopalan, 2023. "Mises's dynamics of interventionism: Lessons from Indian agriculture," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 657-679, January.
    18. Li, Man, 2023. "Adaptation to expected and unexpected weather fluctuations: Evidence from Bangladeshi smallholder farmers," World Development, Elsevier, vol. 161(C).
    19. Helfand, Steven M. & Taylor, Matthew P.H., 2021. "The inverse relationship between farm size and productivity: Refocusing the debate," Food Policy, Elsevier, vol. 99(C).
    20. Lowder, Sarah K. & Sánchez, Marco V. & Bertini, Raffaele, 2021. "Which farms feed the world and has farmland become more concentrated?," World Development, Elsevier, vol. 142(C).
    21. Chiarella, Cristina & Meyfroidt, Patrick & Abeygunawardane, Dilini & Conforti, Piero, 2023. "Balancing the trade-offs between land productivity, labor productivity and labor intensity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 52(10), pages 1618-1634.
    22. Meilin Ma & Jessie Lin & Richard J. Sexton, 2022. "The Transition from Small to Large Farms in Developing Economies: A Welfare Analysis," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(1), pages 111-133, January.

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    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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