IDEAS home Printed from https://ideas.repec.org/a/eee/deveco/v139y2019icp78-96.html
   My bibliography  Save this article

Asymmetric non-separation and rural labor markets

Author

Listed:
  • Dillon, Brian
  • Brummund, Peter
  • Mwabu, Germano

Abstract

This paper develops and implements a test that provides insight into the state of rural labor markets. The test is based on a theoretical link between a shortage or surplus in the labor market and asymmetric responses to changes in household composition. We develop auxiliary tests to distinguish other market imperfections from labor market imperfections, and provide evidence that most changes in household composition are exogenous to local labor market conditions. We implement the test using data from Ethiopia, Malawi, Tanzania, and Uganda. The overall pattern is one of excess labor supply in rural areas, with heterogeneity across cultivation phases, genders, and agro-ecological zones. Surplus labor is most evident during low-intensity cultivation phases. In Ethiopia, there is suggestive evidence that credit constraints create a de facto labor shortage for poorer households. There is also evidence of partial gender segmentation in rural labor markets.

Suggested Citation

  • Dillon, Brian & Brummund, Peter & Mwabu, Germano, 2019. "Asymmetric non-separation and rural labor markets," Journal of Development Economics, Elsevier, vol. 139(C), pages 78-96.
  • Handle: RePEc:eee:deveco:v:139:y:2019:i:c:p:78-96
    DOI: 10.1016/j.jdeveco.2018.12.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304387818300944
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jdeveco.2018.12.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gharad Bryan & Shyamal Chowdhury & Ahmed Mushfiq Mobarak, 2014. "Underinvestment in a Profitable Technology: The Case of Seasonal Migration in Bangladesh," Econometrica, Econometric Society, vol. 82(5), pages 1671-1748, September.
    2. Osmani, S. R., 1990. "Wage determination in rural labour markets : The theory of implicit co-operation," Journal of Development Economics, Elsevier, vol. 34(1-2), pages 3-23, November.
    3. Barrett, Christopher B., 1996. "On price risk and the inverse farm size-productivity relationship," Journal of Development Economics, Elsevier, vol. 51(2), pages 193-215, December.
    4. Amartya K. Sen, 1966. "Peasants and Dualism with or without Surplus Labor," Journal of Political Economy, University of Chicago Press, vol. 74(5), pages 425-425.
    5. Berhane, Guush & Dereje, Mekdim & Minten, Bart & Tamru, Seneshaw, 2020. "The rapid-but from a low base-uptake of agricultural mechanization in Ethiopia: Patterns, implications, and challenges," IFPRI book chapters, in: An evolving paradigm of agricultural mechanization development: How much can Africa learn from Asia?, chapter 10, pages 329-375, International Food Policy Research Institute (IFPRI).
    6. Markus Goldstein & Christopher Udry, 2008. "The Profits of Power: Land Rights and Agricultural Investment in Ghana," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 981-1022, December.
    7. Kien T. Le, 2010. "Separation Hypothesis Tests in the Agricultural Household Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(5), pages 1420-1431.
    8. Udry, Christopher, 1996. "Gender, Agricultural Production, and the Theory of the Household," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 1010-1046, October.
    9. Bachewe, Fantu Nisrane & Berhane, Guush & Minten, Bart & Taffesse, Alemayehu Seyoum, 2016. "Synopsis: Non-farm income and labor markets in rural Ethiopia," ESSP research notes 61, International Food Policy Research Institute (IFPRI).
    10. Dillon, Brian & Barrett, Christopher B., 2017. "Agricultural factor markets in Sub-Saharan Africa: An updated view with formal tests for market failure," Food Policy, Elsevier, vol. 67(C), pages 64-77.
    11. Joan Hamory & Marieke Kleemans & Nicholas Y Li & Edward Miguel, 2021. "Reevaluating Agricultural Productivity Gaps with Longitudinal Microdata," Journal of the European Economic Association, European Economic Association, vol. 19(3), pages 1522-1555.
    12. Dillon, Brian & Voena, Alessandra, 2018. "Widows' land rights and agricultural investment," Journal of Development Economics, Elsevier, vol. 135(C), pages 449-460.
    13. Ingrid Yngstrom, 2002. "Women, Wives and Land Rights in Africa: Situating Gender Beyond the Household in the Debate Over Land Policy and Changing Tenure Systems," Oxford Development Studies, Taylor & Francis Journals, vol. 30(1), pages 21-40.
    14. Ali, Daniel Ayalew & Deininger, Klaus & Goldstein, Markus, 2014. "Environmental and gender impacts of land tenure regularization in Africa: Pilot evidence from Rwanda," Journal of Development Economics, Elsevier, vol. 110(C), pages 262-275.
    15. Benjamin, Dwayne, 1992. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models," Econometrica, Econometric Society, vol. 60(2), pages 287-322, March.
    16. Allendorf, Keera, 2007. "Do Women's Land Rights Promote Empowerment and Child Health in Nepal?," World Development, Elsevier, vol. 35(11), pages 1975-1988, November.
    17. Douglas Gollin & David Lagakos & Michael E. Waugh, 2014. "The Agricultural Productivity Gap," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(2), pages 939-993.
    18. Anjini Kochar, 1999. "Smoothing Consumption by Smoothing Income: Hours-of-Work Responses to Idiosyncratic Agricultural Shocks in Rural India," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 50-61, February.
    19. Bachewe, Fantu Nisrane & Berhane, Guush & Minten, Bart & Taffesse, Alemayehu Seyoum, 2016. "Non-farm income and labor markets in rural Ethiopia," ESSP working papers 90, International Food Policy Research Institute (IFPRI).
    20. Daniel LaFave & Duncan Thomas, 2016. "Farms, Families, and Markets: New Evidence on Completeness of Markets in Agricultural Settings," Econometrica, Econometric Society, vol. 84, pages 1917-1960, September.
    21. Holden, Stein T. & Otsuka, Keijiro, 2014. "The roles of land tenure reforms and land markets in the context of population growth and land use intensification in Africa," Food Policy, Elsevier, vol. 48(C), pages 88-97.
    22. World Bank, 2017. "World Development Indicators 2017," World Bank Publications - Books, The World Bank Group, number 26447.
    23. McCullough, Ellen B., 2017. "Labor productivity and employment gaps in Sub-Saharan Africa," Food Policy, Elsevier, vol. 67(C), pages 133-152.
    24. Günther Fink & B. Kelsey Jack & Felix Masiye, 2020. "Seasonal Liquidity, Rural Labor Markets, and Agricultural Production," American Economic Review, American Economic Association, vol. 110(11), pages 3351-3392, November.
    25. Supreet Kaur, 2019. "Nominal Wage Rigidity in Village Labor Markets," American Economic Review, American Economic Association, vol. 109(10), pages 3585-3616, October.
    26. Fafchamps, Marcel, 1993. "Sequential Labor Decisions under Uncertainty: An Estimable Household Model of West-African Farmers," Econometrica, Econometric Society, vol. 61(5), pages 1173-1197, September.
    27. Benjamin, Dwayne & Brandt, Loren, 1995. "Markets, Discrimination, and the Economic Contribution of Women in China: Historical Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 44(1), pages 63-104, October.
    28. Jean P. Drèze & Anindita Mukherjee, 1989. "Labour Contracts in Rural India: Theories and Evidence," International Economic Association Series, in: Sukhamoy Chakravarty (ed.), The Balance between Industry and Agriculture in Economic Development, chapter 10, pages 233-265, Palgrave Macmillan.
    29. Cheryl Doss & Chiara Kovarik & Amber Peterman & Agnes Quisumbing & Mara Bold, 2015. "Gender inequalities in ownership and control of land in Africa: myth and reality," Agricultural Economics, International Association of Agricultural Economists, vol. 46(3), pages 403-434, May.
    30. repec:oup:qjecon:v:129:y:2014:i:2:p:939-993. is not listed on IDEAS
    31. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    32. Besley, Timothy, 1995. "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 903-937, October.
    33. Feder, Gershon, 1985. "The relation between farm size and farm productivity : The role of family labor, supervision and credit constraints," Journal of Development Economics, Elsevier, vol. 18(2-3), pages 297-313, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aragón, Fernando M. & Restuccia, Diego & Rud, Juan Pablo, 2022. "Are small farms really more productive than large farms?," Food Policy, Elsevier, vol. 106(C).
    2. Merfeld, Joshua D., 2020. "Smallholders, Market Failures, and Agricultural Production: Evidence from India," IZA Discussion Papers 13682, Institute of Labor Economics (IZA).
    3. Maria Jones & Florence Kondylis & John Loeser & Jeremy Magruder, 2022. "Factor Market Failures and the Adoption of Irrigation in Rwanda," American Economic Review, American Economic Association, vol. 112(7), pages 2316-2352, July.
    4. Tsuda, Shunsuke, 2022. "Refugee inflows, surplus farm labor, and crop marketization in rural Africa," Journal of Development Economics, Elsevier, vol. 155(C).
    5. Takeshima, Hiroyuki & Kishore, Avinash & Kumar, Anjani, 2024. "Climate shocks and fertilizer responses: Field-level evidence for rice production in Bangladesh," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344280, International Association of Agricultural Economists (IAAE).
    6. Kebede, Hundanol A., 2022. "Market integration and separability of production and consumption decisions in farm households," Journal of Development Economics, Elsevier, vol. 158(C).
    7. Marcos Rangel & Duncan Thomas, 2019. "Decision-Making in Complex Households," NBER Working Papers 26511, National Bureau of Economic Research, Inc.
    8. Kopper, Sarah A. & Jayne, Thomas S., 2019. "Market access, agro-ecological conditions, and Boserupian agricultural intensification patterns in Kenya: Implications for agricultural programs and research," World Development, Elsevier, vol. 124(C), pages 1-1.
    9. Kopper, Sarah A. & Jayne, Thomas S. & Snapp, Sieglinde S., 2020. "Sifting through the weeds: Understanding heterogeneity in fertilizer and labor response in Central Malawi," Ecological Economics, Elsevier, vol. 169(C).
    10. Elisa Meneghello & Martina Menon & Federico Perali & Furio Rosati, 2022. "The Shadow Wage of Child Labor: An application to Nepal," Working Papers 8, SITES.
    11. Daniel R. LaFave & Evan D. Peet & Duncan Thomas, 2020. "Farm Profits, Prices and Household Behavior," NBER Working Papers 26636, National Bureau of Economic Research, Inc.
    12. Thomas, Duncan & Rangel, Marcos, 2020. "Decision-Making in Complex Households," CEPR Discussion Papers 14278, C.E.P.R. Discussion Papers.
    13. Batara Surya & Haeruddin Saleh & Hamsina Hamsina & Muhammad Idris & Despry Nur Annisa Ahmad, 2021. "Rural Agribusiness-Based Agropolitan Area Development and Environmental Management Sustainability: Regional Economic Growth Perspectives," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 142-157.
    14. Marcos A. Rangel & Duncan Thomas, 2019. "Decision-Making in Complex Households," Working Papers 2019-070, Human Capital and Economic Opportunity Working Group.
    15. de Janvry, Alain & Duquennois, Claire & Sadoulet, Elisabeth, 2022. "Labor calendars and rural poverty: A case study for Malawi," Food Policy, Elsevier, vol. 109(C).
    16. Cynthia Kinnan & Krislert Samphantharak & Robert Townsend & Diego Vera-Cossio, 2019. "Insurance and Propagation in Village Networks," PIER Discussion Papers 115, Puey Ungphakorn Institute for Economic Research.
    17. Peterson-Wilhelm, Bailey & Schwab, Benjamin, 2022. "How does recall bias impact separability tests?," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322221, Agricultural and Applied Economics Association.
    18. Nouve, Yawotse & McCullough, Ellen, 2021. "Consumption-Side Separability Test of Agricultural Households," 2021 Annual Meeting, August 1-3, Austin, Texas 314034, Agricultural and Applied Economics Association.
    19. Farris, Jarrad G., 2020. "Does Unobserved Land Quality Bias Separability Tests?," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304591, Agricultural and Applied Economics Association.
    20. Alia, Didier Y. & Wineman, Ayala Y. & Anderson, C. Leigh, 2020. "Development Assistance and Factor Markets In Nigeria: An Application of the Test of Agricultural Household Separability," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304474, Agricultural and Applied Economics Association.
    21. Merfeld, Joshua, 2021. "Misallocation and Agricultural Production: Evidence from India," 2021 Conference, August 17-31, 2021, Virtual 315914, International Association of Agricultural Economists.
    22. Merfeld, Joshua D., 2022. "Labor Elasticities, Market Failures, and Misallocation: Evidence from Indian Agriculture," 96th Annual Conference, April 4-6, 2022, K U Leuven, Belgium 321214, Agricultural Economics Society - AES.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maria Jones & Florence Kondylis & John Loeser & Jeremy Magruder, 2022. "Factor Market Failures and the Adoption of Irrigation in Rwanda," American Economic Review, American Economic Association, vol. 112(7), pages 2316-2352, July.
    2. Kopper, Sarah A., 2018. "Agricultural labor markets and fertilizer demand: Intensification is not a single factor problem for non-separable households," 2018 Annual Meeting, August 5-7, Washington, D.C. 274184, Agricultural and Applied Economics Association.
    3. Dillon, Brian & Voena, Alessandra, 2018. "Widows' land rights and agricultural investment," Journal of Development Economics, Elsevier, vol. 135(C), pages 449-460.
    4. Katharina Grabrucker & Michael Grimm, 2021. "Is There a Rainbow after the Rain? How Do Agricultural Shocks Affect Non‐Farm Enterprises? Evidence from Thailand," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1612-1636, October.
    5. Feyertag, Joseph & Childress, Malcolm & Langdown, Ian & Locke, Anna & Nizalov, Denys, 2021. "How does gender affect the perceived security of land and property rights? Evidence from 33 countries," Land Use Policy, Elsevier, vol. 104(C).
    6. Kang, Munsu & Schwab, Benjamin & Yu, Jisang, 2020. "Gender differences in the relationship between land ownership and managerial rights: Implications for intrahousehold farm labor allocation," World Development, Elsevier, vol. 125(C).
    7. Holden, Stein T. & Ali, Daniel & Deininger, Klaus & Hilhorst, Thea, 2016. "A Land Tenure Module for LSMS," CLTS Working Papers 1/16, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 16 Oct 2019.
    8. Peter Brummund & Joshua D. Merfeld, 2022. "Should farmers farm more? Comparing marginal products within Malawian households," Agricultural Economics, International Association of Agricultural Economists, vol. 53(2), pages 289-306, March.
    9. Lambrecht, Isabel, 2016. "“As a husband I will love, lead, and provide:†Gendered access to land in Ghana:," IFPRI discussion papers 1514, International Food Policy Research Institute (IFPRI).
    10. Merfeld, Joshua D., 2020. "Smallholders, Market Failures, and Agricultural Production: Evidence from India," IZA Discussion Papers 13682, Institute of Labor Economics (IZA).
    11. Tsuda, Shunsuke, 2022. "Refugee inflows, surplus farm labor, and crop marketization in rural Africa," Journal of Development Economics, Elsevier, vol. 155(C).
    12. Merfeld, Joshua, 2021. "Misallocation and Agricultural Production: Evidence from India," 2021 Conference, August 17-31, 2021, Virtual 315914, International Association of Agricultural Economists.
    13. Dillon, Brian & Barrett, Christopher B., 2017. "Agricultural factor markets in Sub-Saharan Africa: An updated view with formal tests for market failure," Food Policy, Elsevier, vol. 67(C), pages 64-77.
    14. Zhao, Xiaoxue, 2020. "Land and labor allocation under communal tenure: Theory and evidence from China," Journal of Development Economics, Elsevier, vol. 147(C).
    15. Daniel R. LaFave & Evan D. Peet & Duncan Thomas, 2020. "Farm Profits, Prices and Household Behavior," NBER Working Papers 26636, National Bureau of Economic Research, Inc.
    16. Lambrecht, Isabel Brigitte, 2016. "“As a Husband I Will Love, Lead, and Provide.” Gendered Access to Land in Ghana," World Development, Elsevier, vol. 88(C), pages 188-200.
    17. Merfeld, Joshua D., 2022. "Labor Elasticities, Market Failures, and Misallocation: Evidence from Indian Agriculture," 96th Annual Conference, April 4-6, 2022, K U Leuven, Belgium 321214, Agricultural Economics Society - AES.
    18. Gottlieb, Charles & Grobovšek, Jan, 2019. "Communal land and agricultural productivity," Journal of Development Economics, Elsevier, vol. 138(C), pages 135-152.
    19. Genicot, Garance & Hernandez-de-Benito, Maria, 2022. "Women’s land rights and village institutions in Tanzania," World Development, Elsevier, vol. 153(C).
    20. Meinzen-Dick, Ruth Suseela & Quisumbing, Agnes R. & Doss, Cheryl R. & Theis, Sophie, 2017. "Women’s land rights as a pathway to poverty reduction: A framework and review of available evidence," IFPRI discussion papers 1663, International Food Policy Research Institute (IFPRI).

    More about this item

    Keywords

    Agricultural households; Labor markets; Separation; Asymmetric adjustment; Eastern Africa;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:139:y:2019:i:c:p:78-96. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/devec .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.