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

Author

Listed:
  • Katsushi Imai

    (Associate Professor, Department of Economics, School of Social Sciences, University of Manchester, United Kingdom. Author email: Katsushi.Imai@manchester.ac.uk)

  • Raghav Gaiha

    (Honorary Professorial Research Fellow, Global Development Institute, University of Manchester, United Kingdom and Visiting Scholar, Population Studies Centre, University of Pennsylvania, United States)

  • Fabrizio Bresciani

    (Lead Economist, Asia and the Pacific Division, International Fund for Agricultural Development, Italy. Author email: f.bresciani@ifad.org)

Abstract

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.

Suggested Citation

  • Katsushi Imai & Raghav Gaiha & Fabrizio Bresciani, 2019. "The Labor Productivity Gap between the Agricultural and Nonagricultural Sectors, and Poverty and Inequality Reduction in Asia," Asian Development Review, MIT Press, vol. 36(1), pages 112-135, March.
    • Handle: RePEc:tpr:adbadr:v:36:y:2019:i:1:p:112-135
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    More about this item

    Keywords

    agricultural labor productivity; Asia; inequality; labor productivity gap; poverty;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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