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Agricultural Mechanization and Non-Farm Labor Supply of Farm Households: Evidence from Bangladesh

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  • Ahmed, Mansur
  • Goodwin, Barry

Abstract

This paper investigates the role of adoption of agricultural mechanization on the non-farm labor supply behavior of farm households using a longitudinal data set from Bangladesh. The paper uses an agricultural household model to establish the link between the labor-saving technology adoption decision and the non-farm labor supply behavior. To control for potential endogeneity between the farm mechanization and the non-farm labor supply behavior; we use bivariate probit model (BPM), endogenous switching probit model (SPM) and endogenous treatment effects (ETE) model. The results confirm that labor-saving technology adoption raises both the probability of participation in the rural non-farm sector and the labor-supply to the rural non-farm sector. The average treatment effects (ATE) on the probability of participation in the rural non-farm sector are 0.30 in the BPM and 0.21 in the SPM. The results from the ETE model also confirm that the farm households double their labor supply in the rural non-farm sector, given the adoption of labor-saving technology.

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  • Ahmed, Mansur & Goodwin, Barry, "undated". "Agricultural Mechanization and Non-Farm Labor Supply of Farm Households: Evidence from Bangladesh," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236131, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:236131
    DOI: 10.22004/ag.econ.236131
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    2. Alwang, Jeffrey & Gotor, Elisabetta & Thiele, Graham & Hareau, Guy & Jaleta, Moti & Chamberlin, Jordan, 2019. "Pathways from research on improved staple crop germplasm to poverty reduction for smallholder farmers," Agricultural Systems, Elsevier, vol. 172(C), pages 16-27.
    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. Xiaoshi Zhou & Wanglin Ma & Gucheng Li, 2018. "Draft Animals, Farm Machines and Sustainable Agricultural Production: Insight from China," Sustainability, MDPI, vol. 10(9), pages 1-16, August.
    5. Ma, Wanglin & Renwick, Alan & Grafton, Quentin, 2018. "Farm machinery use, off-farm employment and farm performance in China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(2), April.

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    Farm Management; International Development; Labor and Human Capital;
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