Revisiting nutrition\u2013labor productivity link: new empirical evidence from farm households in Ethiopia

Abstract

BackgroundAmong others, the productive use of surplus labor is a viable mechanism to transform the agricultural sector and thus the whole economy in low-income countries. It is critically important to understand the factors that condition labor productivity to design and deploy effective agricultural and labor market policies. A few studies confirm that, at low-income levels, improving nutrition can contribute to the labor productivity of households. These studies rely heavily on self-reported farm data, which are prone to systematic and random measurement errors. The empirical evidence on this topic remains inadequate and inconclusive for this reason. Here, we substantiate whether better nutritional status enhances the labor productivity of farm households using objective measures of plot-level data from a recent household survey in Ethiopia. We also employ alternative measures of nutrition status indicators known as, Food Consumption Score (FCS) and Household Dietary Diversity Score (HDDS), inter alia, to capture additional aspects of nutrition such as diet quality and diversity, which are overlooked by calorie intake data. To deal with possible endogeneity, we employ a panel fixed effect estimation technique with a rich set of household socioeconomic and plot characteristics.ResultsWe observe that the impact of current nutritional status, as measured by HDDS, on labor productivity varies considerably depending on the initial level of diet quality and diversity with a stronger and positive effect for low-consumption households. In an alternative specification, we also observe a positive farm labor productivity effect of current nutritional status as measured by FCS with a homogenous effect across households. However, the effect of the outcome of past nutritional status as evaluated by the Activity of Daily Living Index (ADLI) seems negligible.ConclusionOur findings indicate that improving nutrition can contribute to farm labor productivity at least for households with low current diet quality and diversity. Also, based on the findings, we conclude that there is a possibility of a low consumption–low productivity trap in Ethiopia.