The use of an identity to examine the association between technological changes and aggregate labour utilization in agriculture

Abstract

Summary The purpose of this article is to examine certain aspects of the interaction between changes in agricultural technology and changes in the aggregate level of labour utilization in agriculture. The first part of the article describes an identity which establishes a relationship between the average output per person in agriculture, the size of the agricultural labour force in relation to the area under cultivation, and the average yield per acre of cultivated land. It also suggests that changes in each of the two latter parts of the identity can be associated with a particular form of technological change. The second part presents the Japanese, Taiwanese and Mexican experiences of agricultural growth in terms of the identity, with supporting data on the nature of the technological changes that have occurred. The final part begins with a summary of the experience of the three countries. Thereafter, it suggests that, in view of the high rate of growth of the labour force in developing countries, there should be a greater appreciation of the ways in which government policies may influence the direction of technological changes and of the possible implications of these changes on aggregate levels of labour utilization in agriculture. The approach to assessing the impact of technological change that is incorporated in this paper differs in two respects from the approaches of standard literature on the subject (3, pp. 88–101; 4, pp. 709–29; 1, pp. 312–20). ∗ In the first place, it involves an explicit though partial explanation of the phenomenon rather than an emphasis on measuring its effect. Each of the two forms of technological change—land‐saving and labour‐saving—is identified as the introduction of particular new resources. A more complete explanation would require an additional hypothesis as to why individual entrepreneurs might want to innovate (that is, to introduce new resources); no such hypothesis is included in this study. In the second place, the suggested approach does not require the specification of a production function. The use of an identity has the advantage of allowing useful insights into the process of technological change while avoiding the analytical biases that can be introduced in specifying a production function.