Agricultural productivity and the sectoral reallocation of labor in rural India
How do shocks to agricultural productivity affect the allocation of labor across sectors of the economy? To answer this, I use data from rural India to show that exogenous increases in agricultural productivity — caused by abnormally high levels of precipitation — lead to an increase in the labor sh...
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| Veröffentlicht in: | Journal of development economics Jg. 135; S. 488 - 503 |
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| Format: | Journal Article |
| Sprache: | Englisch |
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Elsevier B.V
01.11.2018
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| ISSN: | 0304-3878, 1872-6089 |
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| Abstract | How do shocks to agricultural productivity affect the allocation of labor across sectors of the economy? To answer this, I use data from rural India to show that exogenous increases in agricultural productivity — caused by abnormally high levels of precipitation — lead to an increase in the labor share of the non-agricultural sector. I further show that the non-tradable sector expands significantly when agricultural output increases. This evidence is consistent with increasing agricultural output causing increased demand for local non-tradables, which in turn increases the non-agricultural labor share.
•Short-term increases in agricultural productivity in India cause labor to shift to the non-agricultural sector.•Consistent with local demand effects, local non-tradable sectors absorb much of the labor that leaves agriculture.•The effects are largest for more educated and higher caste households. |
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| AbstractList | How do shocks to agricultural productivity affect the allocation of labor across sectors of the economy? To answer this, I use data from rural India to show that exogenous increases in agricultural productivity — caused by abnormally high levels of precipitation — lead to an increase in the labor share of the non-agricultural sector. I further show that the non-tradable sector expands significantly when agricultural output increases. This evidence is consistent with increasing agricultural output causing increased demand for local non-tradables, which in turn increases the non-agricultural labor share.
•Short-term increases in agricultural productivity in India cause labor to shift to the non-agricultural sector.•Consistent with local demand effects, local non-tradable sectors absorb much of the labor that leaves agriculture.•The effects are largest for more educated and higher caste households. |
| Author | Emerick, Kyle |
| Author_xml | – sequence: 1 givenname: Kyle surname: Emerick fullname: Emerick, Kyle email: kyle.emerick@tufts.edu organization: Department of Economics Tufts University, 8 Upper Campus Rd, Medford, MA 02155, USA |
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