Agricultural Employment, Wages and Poverty in Developing Countries

35 Pages Posted: 14 Oct 2014

See all articles by Katsushi S. Imai

Katsushi S. Imai

University of Manchester - School of Social Sciences

Raghav Gaiha

University of Delhi - Department of Economics; Australian National University (ANU)

Constanza Di Nucci

International Fund for Agricultural Development (IFAD)

Date Written: September 30, 2014

Abstract

Drawing upon panel data estimations, we have analysed the relationships among agricultural productivity, employment, technology, openness of the economy, inequality in land distribution and poverty. First, we have identified a number of important factors affecting agricultural productivity, such as agricultural R&D expenditure, irrigation, fertilizer use, agricultural tractor/machinery use, reduction in inequality of land distributions, or reduction in gender inequality. Second, while agricultural wage rate is negatively associated with agricultural productivity and food price in levels, the growth in agricultural wage rate is positively correlated with the growth in agricultural land or labour productivity as well as with the growth in food price, particularly after 2000. Contrary to the ILO’s (2012) claim that the gap has widened recently, this suggests the narrowing gap between wage and labour productivity once we focus on the conditional relationship between the two. Third, agricultural employment per hectare tends to increase agricultural productivity after taking account of the endogeneity of the former, while the growth in agricultural employment per hectare tends to increase the growth in non-agricultural employment over time with adjustment for endogeneity of the former. In this context, we have reviewed the recent literature and emphasised the importance of enhancing agricultural productivity and employment. Fourth, both agricultural growth and non-agricultural growth tend to lead to reduction in overall inequality. Finally, increase in agricultural productivity which is treated as endogenous will reduce poverty significantly through the overall economic growth. Overall, policies to increase agricultural productivity and agricultural employment are likely to increase non-agricultural growth, overall growth and reduce poverty, where guaranteeing gender inequality is likely to be one of the key factors.

Keywords: Agriculture, Poverty, Employment, Wage

JEL Classification: C20, I15, I39, O13

Suggested Citation

Imai, Katsushi S. and Gaiha, Raghav and Di Nucci, Constanza, Agricultural Employment, Wages and Poverty in Developing Countries (September 30, 2014). Brooks World Poverty Institute Working Paper No. 209. Available at SSRN: https://ssrn.com/abstract=2509357 or http://dx.doi.org/10.2139/ssrn.2509357

Katsushi S. Imai (Contact Author)

University of Manchester - School of Social Sciences ( email )

Oxford Road
Manchester, M13 9PL
United Kingdom

Raghav Gaiha

University of Delhi - Department of Economics ( email )

Delhi-110007
India

Australian National University (ANU) ( email )

Canberra, Australian Capital Territory 2601
Australia

Constanza Di Nucci

International Fund for Agricultural Development (IFAD) ( email )

Via Paolo di Dono
Rome, 00142
Italy

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