TY - JOUR
T1 - Why is measured productivity so low in agriculture?
AU - Herrendorf, Berthold
AU - Schoellman, Todd
N1 - 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 -