TY - JOUR
T1 - Why is measured productivity so low in agriculture?
AU - Herrendorf, Berthold
AU - Schoellman, Todd
N1 - Funding Information:
For helpful discussions and comments, we thank the editor Matthias Doepke, several anonymous referees, Roozbeh Hosseini, Moritz Kuhn, Patrick Minford, Diego Restuccia, Kerry Smith, Ákos Valentinyi, Gustavo Ventura, and the audiences at Arizona State University, the Canadian Macro Study Group, the Cologne Workshop on Macroeconomics, the Federal Reserve Banks of Minneapolis and St. Louis, the Free University of Berlin, the Growth and Development Conference at Toronto, the HKUST Macroeconomics Conference, the Midwest Macroeconomics Meetings, the Meetings of the Society for Economic Dynamics, the Helsinki Center of Economic Research, Simon Fraser University, the Universities of California at Santa Barbara, Konstanz, Laval, Mannheim, Toronto, and Western Ontario. For financial support, Herrendorf thanks the Spanish Ministry of Education (grants ECO2009-11165 and ECO2012-31358 ).
Publisher Copyright:
© 2014 Elsevier Inc.
PY - 2015/10
Y1 - 2015/10
N2 - In poor countries, labor productivity in agriculture is considerably lower than in the rest of the economy. We assess whether this well-known fact implies that labor is mis-allocated between the two sectors. We make several observations that suggest otherwise. First, the same fact holds for US states where severe mis-allocation is implausible. Second, the gaps between the marginal value products of agriculture and non-agriculture are considerably smaller when measured through wages than through labor productivities. Third, labor productivity in agriculture is severely mis-measured in the US.
AB - In poor countries, labor productivity in agriculture is considerably lower than in the rest of the economy. We assess whether this well-known fact implies that labor is mis-allocated between the two sectors. We make several observations that suggest otherwise. First, the same fact holds for US states where severe mis-allocation is implausible. Second, the gaps between the marginal value products of agriculture and non-agriculture are considerably smaller when measured through wages than through labor productivities. Third, labor productivity in agriculture is severely mis-measured in the US.
KW - Mis-allocation of labor
KW - Productivity gaps
KW - Wage gaps
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U2 - 10.1016/j.red.2014.10.006
DO - 10.1016/j.red.2014.10.006
M3 - Article
AN - SCOPUS:84921442890
SN - 1094-2025
VL - 18
SP - 1003
EP - 1022
JO - Review of Economic Dynamics
JF - Review of Economic Dynamics
IS - 4
ER -