IDEAS home Printed from https://ideas.repec.org/a/eee/deveco/v155y2022ics0304387821001607.html
   My bibliography  Save this article

Refugee inflows, surplus farm labor, and crop marketization in rural Africa

Author

Listed:
  • Tsuda, Shunsuke

Abstract

This paper sheds light on the structure of factor and output market frictions to investigate long-term effects of refugee inflows on host farmers. Combining a canonical agricultural household model, the natural experimental setting of mass refugee inflows into Tanzania in the early 1990s, and longitudinal panel data from the host economy, I show that refugee inflows cause market-specific gains and losses. Refugee inflows tighten the off-farm labor market participation constraint, implying an increase in surplus farm labor and labor market inefficiency. On the other hand, I observe a positive impact on the transition from subsistence to crop marketization. This transition is revealed to be primarily due to a reduction in fixed transaction costs around refugee camps, not due to an increase in consumption demand by refugees. While the overall impact on agricultural labor productivity is negative, the “surplus farm labor effect” and the “crop marketization effect” act in opposite directions.

Suggested Citation

  • Tsuda, Shunsuke, 2022. "Refugee inflows, surplus farm labor, and crop marketization in rural Africa," Journal of Development Economics, Elsevier, vol. 155(C).
    • Handle: RePEc:eee:deveco:v:155:y:2022:i:c:s0304387821001607
    DOI: 10.1016/j.jdeveco.2021.102805
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304387821001607
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jdeveco.2021.102805?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. Joachim De Weerdt, 2010. "Moving out of Poverty in Tanzania: Evidence from Kagera," Journal of Development Studies, Taylor & Francis Journals, vol. 46(2), pages 331-349.
    2. Emmanuel Skoufias, 1994. "Using Shadow Wages to Estimate Labor Supply of Agricultural Households," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(2), pages 215-227.
    3. Renkow, Mitch & Hallstrom, Daniel G. & Karanja, Daniel D., 2004. "Rural infrastructure, transactions costs and market participation in Kenya," Journal of Development Economics, Elsevier, vol. 73(1), pages 349-367, February.
    4. Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
    5. 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.
    6. Mette Foged & Giovanni Peri, 2016. "Immigrants' Effect on Native Workers: New Analysis on Longitudinal Data," American Economic Journal: Applied Economics, American Economic Association, vol. 8(2), pages 1-34, April.
    7. David Card, 1990. "The Impact of the Mariel Boatlift on the Miami Labor Market," ILR Review, Cornell University, ILR School, vol. 43(2), pages 245-257, January.
    8. Christopher B. Barrett & Shane M. Sherlund & Akinwumi A. Adesina, 2008. "Shadow wages, allocative inefficiency, and labor supply in smallholder agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 38(1), pages 21-34, January.
    9. Barrett, Christopher B., 2008. "Smallholder market participation: Concepts and evidence from eastern and southern Africa," Food Policy, Elsevier, vol. 33(4), pages 299-317, August.
    10. 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.
    11. Andrew D. Foster & Mark R. Rosenzweig, 2022. "Are There Too Many Farms in the World? Labor Market Transaction Costs, Machine Capacities, and Optimal Farm Size," Journal of Political Economy, University of Chicago Press, vol. 130(3), pages 636-680.
    12. Alberto Abadie & Susan Athey & Guido W Imbens & Jeffrey M Wooldridge, 2023. "When Should You Adjust Standard Errors for Clustering?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(1), pages 1-35.
    13. Baez, Javier E., 2011. "Civil wars beyond their borders: The human capital and health consequences of hosting refugees," Journal of Development Economics, Elsevier, vol. 96(2), pages 391-408, November.
    14. 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.
    15. Isabel Ruiz & Carlos Vargas‐Silva, 2018. "The impact of hosting refugees on the intra‐household allocation of tasks: A gender perspective," Review of Development Economics, Wiley Blackwell, vol. 22(4), pages 1461-1488, November.
    16. Foster, Andrew D. & Rosenzweig, Mark R., 2010. "Is There Surplus Labor in Rural India?," Center Discussion Papers 95273, Yale University, Economic Growth Center.
    17. Ito, Takahiro, 2009. "Caste discrimination and transaction costs in the labor market: Evidence from rural North India," Journal of Development Economics, Elsevier, vol. 88(2), pages 292-300, March.
    18. Christopher Blattman & Edward Miguel, 2010. "Civil War," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 3-57, March.
    19. 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.
    20. Lauren Falcao Bergquist & Michael Dinerstein, 2020. "Competition and Entry in Agricultural Markets: Experimental Evidence from Kenya," American Economic Review, American Economic Association, vol. 110(12), pages 3705-3747, December.
    21. Jean-François Maystadt & Philip Verwimp, 2014. "Winners and Losers among a Refugee-Hosting Population," Economic Development and Cultural Change, University of Chicago Press, vol. 62(4), pages 769-809.
    22. Alain Janvry & Elisabeth Sadoulet, 2006. "Progress in the Modeling of Rural Households’ Behavior under Market Failures," Economic Studies in Inequality, Social Exclusion, and Well-Being, in: Alain Janvry & Ravi Kanbur (ed.), Poverty, Inequality and Development, chapter 0, pages 155-181, Springer.
    23. de Janvry, Alain & Fafchamps, Marcel & Sadoulet, Elisabeth, 1991. "Peasant Household Behaviour with Missing Markets: Some Paradoxes Explained," Economic Journal, Royal Economic Society, vol. 101(409), pages 1400-1417, November.
    24. 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.
    25. Nicholas Li, 2021. "In-kind transfers, marketization costs and household specialization: Evidence from Indian farmers," Working Papers tecipa-700, University of Toronto, Department of Economics.
    26. Semih Tumen, 2016. "The Economic Impact of Syrian Refugees on Host Countries: Quasi-experimental Evidence from Turkey," American Economic Review, American Economic Association, vol. 106(5), pages 456-460, May.
    27. Binswanger, Hans P & McIntire, John, 1987. "Behavioral and Material Determinants of Production Relations in Land-Abundant Tropical Agriculture," Economic Development and Cultural Change, University of Chicago Press, vol. 36(1), pages 73-99, October.
    28. Hanan G. Jacoby, 1993. "Shadow Wages and Peasant Family Labour Supply: An Econometric Application to the Peruvian Sierra," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(4), pages 903-921.
    29. Stephan J. Goetz, 1992. "A Selectivity Model of Household Food Marketing Behavior in Sub-Saharan Africa," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(2), pages 444-452.
    30. de Janvry, Alain & Fafchamps, M. & Sadoulet, Elisabeth, 1991. "Peasant Household Behavior with Missing Markets: Some Paradoxes Explain," CUDARE Working Papers 198579, University of California, Berkeley, Department of Agricultural and Resource Economics.
    31. Sadoulet, Elisabeth & de Janvry, Alain & Benjamin, Catherine, 1996. "Household Behavior With Imperfect Labor Markets," CUDARE Working Papers 25044, University of California, Berkeley, Department of Agricultural and Resource Economics.
    32. Morales, Juan S., 2018. "The impact of internal displacement on destination communities: Evidence from the Colombian conflict," Journal of Development Economics, Elsevier, vol. 131(C), pages 132-150.
    33. Isabel Ruiz & Carlos Vargas-Silva, 2016. "The labour market consequences of hosting refugees," Journal of Economic Geography, Oxford University Press, vol. 16(3), pages 667-694.
    34. Fallah, Belal & Krafft, Caroline & Wahba, Jackline, 2019. "The impact of refugees on employment and wages in Jordan," Journal of Development Economics, Elsevier, vol. 139(C), pages 203-216.
    35. Douglas Gollin, 2014. "The Lewis Model: A 60-Year Retrospective," Journal of Economic Perspectives, American Economic Association, vol. 28(3), pages 71-88, Summer.
    36. Sonoda, Tadashi, 2004. "“Internal Instability" of Peasant Households: A Further Analysis of the de Janvry, Fafchamps, and Sadoulet Model," Japanese Journal of Agricultural Economics (formerly Japanese Journal of Rural Economics), Agricultural Economics Society of Japan (AESJ), vol. 6, pages 1-12.
    37. 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.
    38. 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.
    39. Hans P. Binswanger, 2000. "The Growth Performance of Agriculture in Subsaharan Africa," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(5), pages 1075-1086.
    40. Alix-Garcia, Jennifer & Walker, Sarah & Bartlett, Anne & Onder, Harun & Sanghi, Apurva, 2018. "Do refugee camps help or hurt hosts? The case of Kakuma, Kenya," Journal of Development Economics, Elsevier, vol. 130(C), pages 66-83.
    41. Jean-Philippe Platteau & Yujiro Hayami & Partha Dasgupta, 1998. "Resource Endowments and Agricultural Development: Africa versus Asia," International Economic Association Series, in: Yujiro Hayami & Masahiko Aoki (ed.), The Institutional Foundations of East Asian Economic Development, chapter 12, pages 357-412, Palgrave Macmillan.
    42. Udry, Christopher, 2010. "The economics of agriculture in Africa: Notes toward a research program," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 5(1), pages 1-16, September.
    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. Maliata Athon Wanga & Hussein Shimelis & Girma Mengistu, 2022. "Sorghum Production in Northern Namibia: Farmers’ Perceived Constraints and Trait Preferences," Sustainability, MDPI, vol. 14(16), pages 1-16, August.
    2. Henrique, 2024. "The Power of Dialogue: Forced Displacement and Social Integration amid an Islamist Insurgency in Mozambique," HiCN Working Papers 405, Households in Conflict Network.
    3. Rama Dasi Mariani & Furio Camillo Rosati & Pasquale Scaramozzino & Marco d'Errico, 2023. "Gains from Variety: Refugee-Host Interactions in Uganda," CEIS Research Paper 553, Tor Vergata University, CEIS, revised 23 Feb 2023.

    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. Verme, Paolo & Schuettler, Kirsten, 2021. "The impact of forced displacement on host communities: A review of the empirical literature in economics," Journal of Development Economics, Elsevier, vol. 150(C).
    2. 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.
    3. Hayatullah Ahmadzai, 2018. "Factor market participation and tests for separability in Afghanistan," Discussion Papers 2018-10, University of Nottingham, CREDIT.
    4. Merfeld, Joshua D., 2020. "Smallholders, Market Failures, and Agricultural Production: Evidence from India," IZA Discussion Papers 13682, Institute of Labor Economics (IZA).
    5. Henning, Christian H.C.A. & Henningsen, Arne, 2005. "Modeling Price Response of Farm Households Under Imperfect Labor Markets: A Farm Household Approach to Family Farms in Poland," 94th Seminar, April 9-10, 2005, Ashford, UK 24431, European Association of Agricultural Economists.
    6. Wang, Xiaobing, 2007. "Labor market behavior of Chinese rural households during transition," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 42, number 92321.
    7. 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.
    8. 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.
    9. 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.
    10. Chen, Jing & Rozelle, Scott, 2003. "Market Emergence And The Rise And Fall Of Backyard Hog Production In China," 2003 Annual meeting, July 27-30, Montreal, Canada 21969, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Md Shafiul Azam & Katsushi Imai & Raghav Gaiha, 2012. "Agricultural Supply Response and Smallholders Market Participation: the Case of Cambodia," Economics Discussion Paper Series 1208, Economics, The University of Manchester.
    12. Porgo, Mohamed & Kuwornu, John K.M. & Zahonogo, Pam & Jatoe, John Baptist D. & Egyir, Irene S., 2018. "Credit constraints and cropland allocation decisions in rural Burkina Faso," Land Use Policy, Elsevier, vol. 70(C), pages 666-674.
    13. Aysun Aygun & Murat Guray Kirdar & Berna Tuncay, 2020. "The Effect of Hosting 3.4 Million Refugees on the Health System in Turkey and Infant, Child, and Elderly Mortality among Natives," Koç University-TUSIAD Economic Research Forum Working Papers 2014, Koc University-TUSIAD Economic Research Forum.
    14. Marcel Fafchamps & Agnes R. Quisumbing, 1999. "Human Capital, Productivity, and Labor Allocation in Rural Pakistan," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 369-406.
    15. Marcel Fafchamps & Agnes R. Quisumbing & IFPRI, 2006. "Household Formation and Marriage Markets," Economics Series Working Papers GPRG-WPS-039, University of Oxford, Department of Economics.
    16. Betts, Alexander & Flinder Stierna, Maria & Omata, Naohiko & Sterck, Olivier, 2023. "Refugees welcome? Inter-group interaction and host community attitude formation," World Development, Elsevier, vol. 161(C).
    17. 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.
    18. Betts,Alexander Milton Stedman & Stierna,Maria Flinder & Omata,Naohiko & Sterck,Olivier Christian Brigitte, 2022. "Social Cohesion and Refugee-Host Interactions : Evidence from East Africa," Policy Research Working Paper Series 9917, The World Bank.
    19. Giacomo Zanello & Chittur S. Srinivasan & Bhavani Shankar, 2014. "Transaction Costs, Information Technologies, and the Choice of Marketplace among Farmers in Northern Ghana," Journal of Development Studies, Taylor & Francis Journals, vol. 50(9), pages 1226-1239, September.
    20. Escobal, Javier, 2005. "The Role of Public Infraestructure in Market Development in Rural Peru," MPRA Paper 727, University Library of Munich, Germany.

    More about this item

    Keywords

    Refugees; Host economies; Agricultural household models; Market transaction costs; Food aid; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    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:155:y:2022:i:c:s0304387821001607. 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.