Why is measured productivity so low in agriculture?

Berthold Herrendorf, Todd Schoellman

Research output: Contribution to journalArticle

17 Scopus citations

Abstract

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.

Original languageEnglish (US)
Pages (from-to)1003-1022
Number of pages20
JournalReview of Economic Dynamics
Volume18
Issue number4
DOIs
StatePublished - Oct 2015

Keywords

  • Mis-allocation of labor
  • Productivity gaps
  • Wage gaps

ASJC Scopus subject areas

  • Economics and Econometrics

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