Wages, human capital, and barriers to structural transformation

Berthold Herrendorf, Todd Schoellman

Research output: Contribution to journalArticlepeer-review

14 Scopus citations

Abstract

We document for 13 countries ranging from rich (Canada, United States) to poor (India, Indonesia) that average wages are considerably lower in agriculture than in the other sectors. Moreover, agriculture has less educated workers and lower Mincer returns. We view these findings through the lens of a multi-sector model in which workers differ in observed and unobserved characteristics and sectors differ in their human-capital intensities. We derive expressions for the implied barriers to the reallocation of labor out of agriculture. We find that in our sample these barriers are considerably smaller than what the macro-development literature has argued.

Original languageEnglish (US)
Pages (from-to)1-23
Number of pages23
JournalAmerican Economic Journal: Macroeconomics
Volume10
Issue number2
DOIs
StatePublished - Apr 1 2018

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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