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Wage Growth, Landholding and Mechanization in Agriculture

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  • Yamauchi, Futoshi

Abstract

This paper examines dynamic patterns of land use, capital investments and wages in agriculture using farm panel data from Indonesia. The empirical analysis shows that with an increase in real wages that prevailed in both agricultural and non-agricultural sectors in rural areas, relatively larger farmers increased the size of operational farm land by renting in land. An increase in real wages has induced the substitution of labor by machines among relatively large farmers. Machines and land are complementary and, consistently, the inverse land-productivity relationship is reversed among relatively large holders.

Suggested Citation

  • Yamauchi, Futoshi, 2015. "Wage Growth, Landholding and Mechanization in Agriculture," 2015 Conference, August 9-14, 2015, Milan, Italy 212611, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:212611
    DOI: 10.22004/ag.econ.212611
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    References listed on IDEAS

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    5. Wang, Xiaobing & Yamauchi, Futoshi & Otsuka, Keijiro & Huang, Jikun, 2016. "Wage Growth, Landholding, and Mechanization in Chinese Agriculture," World Development, Elsevier, vol. 86(C), pages 30-45.
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    Keywords

    Farm Management; Land Economics/Use;

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