The Labor Productivity Gap between the Agricultural and Nonagricultural Sectors, and Poverty and Inequality Reduction in Asia

The objective of this paper is to examine how agricultural and nonagricultural labor productivities have grown over time and whether the growth pattern affected poverty in low- and middle-income economies in Asia. We first examine whether labor productivities in the agricultural and nonagricultural...

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Bibliographic Details
Published in:Asian development review 2019-03, Vol.36 (1), p.112-135
Main Authors: Imai, Katsushi, Gaiha, Raghav, Bresciani, Fabrizio
Format: Article
Language:English
Subjects:
agricultural labor productivity
Agricultural production
Agriculture
Asia
Convergence
Economic development
Economic growth
Economic models
Farmworkers
Food security
Growth models
Hypotheses
Inequality
Labor productivity
labor productivity gap
Low income groups
Poverty
Rural communities
Urban poverty
Wage rates
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Summary:The objective of this paper is to examine how agricultural and nonagricultural labor productivities have grown over time and whether the growth pattern affected poverty in low- and middle-income economies in Asia. We first examine whether labor productivities in the agricultural and nonagricultural sectors have converged, finding evidence that they did not as the latter have grown faster. We then confirm that both agricultural and nonagricultural labor productivities have converged across economies and that the convergence effect is stronger for the nonagricultural sector. We have also observed that, despite the relatively slower growth in agricultural labor productivity, the agricultural sector played an important role in promoting nonagricultural labor productivity and thus in nonagricultural growth. Finally, we have found some evidence that the labor productivity gap reduces rural and urban poverty, as well as national-level inequality.
ISSN:0116-1105
1996-7241
DOI:10.1162/adev_a_00125