Modern rice technology and regional wage differentials in the Philippines

Abstract

ABSTRACTFear has been widely expressed that the modern rice varieties have created large disparities in regional income distribution, as the productivity gap between favorable and unfavorable rice‐production environments widened due to differential technology adoption throughout South and Southeast Asia over the last two decades.Technology affects the income of farm population directly through its effects on productivity and factor use, and indirectly through its effect on factor prices. In particular, the ultimate distributional impact of modern varieties will critically depend on the interregional labor‐market adjustments through migration in response to regional wage differentials created by the differential technology adoption, since labor is the main resource of the majority of the rural population.We studied favorable and unfavorable rice‐growing villages in the Philippines, and found that adoption of modern varieties during the 1970s was positively related to population growth rate. Contrary to popular belief, no association was observed between wage rates and adoption of modern varieties as of 1986. These findings support the hypothesis that the differential adoption of modern rice varieties induced interregional labor migration toward equalization of wage income across different production environments.