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Human Capital, Productivity, and Labor Allocation in Rural Pakistan

Stanford University Working Paper No. 97-019

49 Pages Posted: 25 Mar 1998  

Marcel Fafchamps

Stanford University - Freeman Spogli Institute for International Studies

Agnes R. Quisumbing

International Food Policy Research Institute (IFPRI)

Date Written: March 1998

Abstract

This paper investigates whether human capital affects the productivity and labor allocation of rural households in four districts of Pakistan. We find that households with better educated males earn higher off-farm income and divert labor resources away from farm activities toward non-farm work. Education has no significant effect on productivity in crop and livestock production. The effect of human capital on household incomes is partly realized through the reallocation of labor from low productivity activities to non-farm work. Female education and nutrition do not affect productivity and labor allocation in any systematic fashion, consistent with the marginal role women play in market oriented activities in Pakistan. As a by-product, our estimation approach also tests the existence of perfect labor and factor markets; this hypothesis is strongly rejected.

JEL Classification: J24, O15

Suggested Citation

Fafchamps, Marcel and Quisumbing, Agnes R., Human Capital, Productivity, and Labor Allocation in Rural Pakistan (March 1998). Stanford University Working Paper No. 97-019. Available at SSRN: https://ssrn.com/abstract=68988 or http://dx.doi.org/10.2139/ssrn.68988

Marcel Fafchamps (Contact Author)

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

Stanford, CA 94305
United States

Agnes Quisumbing

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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