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The Spatial Division of Labor in Nepal

62 Pages Posted: 20 Apr 2016  

Forhad Shilpi

World Bank - Development Research Group (DECRG)

Marcel Fafchamps

Stanford University - Freeman Spogli Institute for International Studies

Date Written: May 15, 2002

Abstract

Fafchamps and Shilpi 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 division of 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.

This paper - a product of Rural Development, Development Research Group - is part of a larger effort in the group to understand the importance of spatical factors in rural development.

Suggested Citation

Shilpi, Forhad and Fafchamps, Marcel, The Spatial Division of Labor in Nepal (May 15, 2002). World Bank Policy Research Working Paper No. 2845. Available at SSRN: https://ssrn.com/abstract=636193

Forhad Shilpi (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-458-7476 (Phone)
202-522-1151 (Fax)

Marcel Fafchamps

Stanford University - Freeman Spogli Institute for International Studies ( email )

Stanford, CA 94305
United States

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