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Family Labour Supply Decisions in Rural Peru

In: Issues in Contemporary Economics

Author

Listed:
  • Paul J. Gertler

    (Rand Corporation)

  • John L. Newman

    (World Bank)

Abstract

Raising rural incomes and increasing agricultural production are two of the primary challenges facing policy-makers in developing countries. While increasing agricultural production calls for policies that raise the return to agricultural activities, higher rural incomes could be achieved by raising both agricultural and non-agricultural returns. The resulting impacts on incomes and agricultural production depend heavily upon the family labour supply responses in both agricultural and non-agricultural activities. Because raising the return of one work activity relative to the other can induce a reallocation of labour between activities, both sectors must be considered jointly. For instance, if an increase in agricultural production comes at the expense of work in non-agricultural activities rather than leisure, the net effect on rural incomes may be negligible. If, at the same time, these policies result in a decline in agricultural output, then the cost of this decline needs to be considered in the evaluation of the policies.

Suggested Citation

  • Paul J. Gertler & John L. Newman, 1991. "Family Labour Supply Decisions in Rural Peru," International Economic Association Series, in: Marc Nerlove (ed.), Issues in Contemporary Economics, chapter 11, pages 284-318, Palgrave Macmillan.
    • Handle: RePEc:pal:intecp:978-1-349-11576-1_11
    DOI: 10.1007/978-1-349-11576-1_11
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