Share Of Agricultural Employment Research Articles

Economic Comparison of Agricultural Sector of Eurasian Countries – Is There Any Potential for Development Through Economic Cooperation?

Eurasia represents an important economic region for the majority of the post-Soviet republics. The structure of their economies is highly dissimilar and reflects the status of agriculture. The aim of the paper is to analyse the relation between agriculture index and GDP per capita Using the basic economic indicators in agriculture (contribution of agriculture to GDP, share of employment in agriculture, agriculture value added per worker and share of rural population) as well as the cluster analysis, the countries were divided into four groups. There are sub-groups within the post-Soviet republics, differing considerably in the status of agriculture in their national economy. A negative correlation between GDP per capita (PPP) and the level of the agriculture index has been proved in the monitored countries.

The declining share of agricultural employment in China: How fast?

Between 1962 and 2013, China's agricultural employment share declined from 82% to 31%. The transfer of workers out of low-productivity agriculture is a fundamental pillar of China's aspirations to progress and eventually become a high-income economy. We hypothesize that the drivers of this decline have been the increase in income per capita, industrial value added, foreign direct investment and domestic credit. We use an Autoregressive Distributed Lag Model to test the strong exogeneity of the regressors. This is confirmed by the data and hence we use our model for forecasting. Results indicate that the share of employment in agriculture in China will decline to about 24% by 2020, the end of the 13th Five-Year Plan (2016–2020). We also estimate that China's employment share will reach 5%, the share observed in today's rich economies, by 2042–2048.

Trends in agriculture, non-farm sector and rural employment in India: An insight from state level analysis

The experience from developed countries established that decline in the share of agriculture in national GDP is an indication of economic progress of the country. However, commensurate with the decline in GDP contribution, the dependency of population on agriculture is also expected to decline. In this context, this paper analysed the performance of Indian agriculture in terms of growth, employment and output using secondary data in the last two decades (1990- 2010) at the national level and also with the special focus on the major states. Specifically the paper discuses: (i) agriculture’s contribution in the national employment and income, (ii) sectoral changes in employment across the states, and (iii) determinants of rural non-farm employment (RNFE). The results have shown that percentage share of agriculture in employment has declined during last two decades, but it was not comparable to the extent of decline in its share in the national GDP. Dependency on agriculture declined for the male workers, while it increased for female workers in the recent decade, indicating feminization of agriculture. The RNFE in different states exceeded over 25 per cent for 12 out of 17 states, and it was significantly high in the states of Kerala, Jammu and Kashmir and Punjab. The determinant analysis revealed that the infrastructure development, agricultural growth and farm-size are the major factors which positively influenced the RNFE, whereas the share of SC and ST population in rural population had negative effect on the growth of RNFE.

Agriculture and Structural Transformation in Developing Asia: Review and Outlook

Relative to other developing regions, developing Asia has experienced a slower decline in employment share in agriculture, compared to its output share; a rapid growth in labor and land productivity; and a shift from agricultural output from traditional to high-value products. The most successful Asian economies have pursued an agricultural development-led industrialization pathway. Nevertheless, agriculture remains the largest employer in many large Asian countries, hence future structural transformation must take into account agricultural transformation. Extrapolating from past trends, and taking to account emerging conditions, many countries of developing Asia will be expected to move on to the next phase of agricultural development; however even in the long term, agriculture’s employment share will continue to be sizable relative with the output share. To expedite transformation, many Asian countries will still need to promote long term productivity growth in agriculture and facilitate upgrading of their farms and agroenterprises within the global value chain.

The Declining Share of Agricultural Employment in the People's Republic of China: How Fast?

From 1962 to 2013, the People’s Republic of China’s (PRC’s) agricultural employment share declined from 82% to 31%. The transfer of workers out of low-productivity agriculture is a fundamental pillar of the PRC’s aspirations to progress and eventually become a high-income economy. We hypothesize that the drivers of this decline have been the increase in income per capita, industrial value added, foreign direct investment, and domestic credit. We use an Autoregressive Distributed Lag Model to test the strong exogeneity of the regressors so that we can use it for forecasting. Results indicate that the share of employment in agriculture in the PRC will decline to about 24% by 2020, the end of the 13th Five-Year Plan (2016-2020). We also estimate that the PRC’s employment share will reach 5%, the share observed in today’s rich economies, by 2042-2048.

Comments by Maria Socorro Gochoco-Bautista, on In Search of a Strategy for Making Growth More Pro-Poor in the Philippines

Maria Socorro Gochoco-Bautista: There is a difference between structural transformation in which the share of agriculture in total output declines over time, and structural transformation in which the share of agricultural sector employment to total employment declines over time as a country develops. The authors state that they would like to focus on the output side of structural adjustment (i.e., what happens to the sectoral shares of output rather than the sectoral shares of labor).I think that, as the focus of the paper is pro-poor growth, it is more important to talk about people and employment rather than output. Indeed, the authors define growth as pro-poor “if and only if poor people benefit in absolute terms, as reflected in an appropriate measure of poverty.” The paper by Loayza and Raddatz (2006) that the authors themselves cite argues that the labor intensity of the growing sector rather than which economic sector in particular is growing is more important.This leads to my suspicion that what makes growth pro-poor is the ability of growth to generate good jobs, and to ultimately reduce the share of agricultural employment to total employment as the economy undergoes structural transformation and develops. If this is the case, then I am afraid that the paper is unable to shed light on how to generate pro-poor growth, even though it is able to point to factors that may generate growth in the economy in general. Of course, because the demand for labor is derived from the demand for output, one would expect the demand for labor to increase in fast-growing sectors and reduce poverty. In Asia, however, we have generally seen that although output growth has been robust, the share of employment in agriculture relative to non-agriculture remains high, and we know that the quality jobs are not in agriculture and that the majority of the poor are in rural areas. Perhaps the employment elasticity of growth in the non-agricultural sector may be low especially if production there is relatively capital intensive. The authors do not give a measure of the labor intensity of the fast-growing non-agricultural sector relative to the agricultural sector.Where to focus reform proposals is important because this has a bearing on policy implications. It is important to take into account where the distortions in the economy are in the context of institutional limitations and which act to prevent growth from being pro-poor. For example, there are barriers to job creation and entry into high-paying jobs in the non-agricultural or industrial sector that act as a tax on the most progressive sector of the economy. This limits the ability of the industrial sector to absorb surplus labor from the rural sector and retards the shift from agricultural to non-agricultural growth. Evidence for these distortions exists. In urban centers, for example, the unemployment rate among those with tertiary education is higher than in those with only primary or secondary levels of education, and the employment rate of the less educated is higher in sectors where regulations are not binding. Such barriers in labor markets may account for gaps in labor productivity between agricultural and non-agricultural sectors. For pro-poor growth, I think that it is important to focus on the labor market and employment generation aspects of structural transformation.In the regression equation, agricultural growth and non-agricultural growth are both entered as regressors, but the two are related to each other. Growth in the agricultural sector makes growth in the non-agricultural sector possible by opening up non-farm employment opportunities, a point the authors make themselves. But because the focus of the paper is on output growth rather than employment growth potential, it is difficult to know with certainty whether growth in any sector is pro-poor.

Tackling the Undeclared Economy in FYR Macedonia: A Baseline Assessment

This report provides a detailed review of available evidence on the extent and nature of the undeclared economy in the Former Yugoslav Republic of Macedonia (FYROM), as well as on the institutional actors involved in tackling the phenomenon and their policy approach and measures used. Extent and nature of the undeclared economySome widely cited international measurements that cover FYROM find that the share of its undeclared economy is larger than in all EU Member States, estimated at 35% of GDP in 2007 (Schneider et al, 2010). Data from the most recent national Labour Force Survey suggests that in 2012 around 22.5% of the workforce was engaged in undeclared work, and therefore was not covered by any social or legal protection (SSO, 2013). This survey further indicates that undeclared work has been declining since 2008, in parallel to an increase in the number of formally employed persons. The age groups most affected by informal employment are young people aged 15-24 (40% of all employed in that age group), as well as those older than 65 years (over 85% of all employed from that age group). When it comes to gender variations, the data reveals that men are slightly more likely to work in the informal sector than women (23.3% of men compared to 21.3% of women for 2012). Moreover, there is a difference in the type of informal work performed with women being mainly informally involved in agriculture, whereas men are self-employed or employers in unregistered firms.There is a clear link between undeclared work and job precariousness in the FYROM: undeclared workers are less likely to hold full-time, permanent waged jobs. Furthermore, wage earners are less likely to work undeclared than sole traders and the self-employed. These trends become even more pronounced in rural areas compared with urban ones, and among the young and ethnic minorities.When it comes to sectorial and business variations in the incidence of undeclared work, the main findings of the World Bank Enterprise Survey 2013 suggests that businesses in manufacturing are more likely that those in retail or services to face competition from unregistered firms. At the same time, formal businesses in retail are more likely to perceive such unfair competition as a major constraint to conducting business in the country. Medium-size enterprises, domestic firms and firms located in South Macedonia are also more likely to face competition from entities operating off-the-books. In general, labour-intensive, low-earning jobs in construction, transport, catering, the textile industry, domestic services, agriculture and trade are particularly prone to undeclared work. Purchasing goods from undeclared merchants at markets is a particularly widespread practice. The share of informal employment in agriculture is significant – between 86.1% and 82.4% of all agricultural employment. This sector is also largely affected by non-standard work. Barriers to formalisationFrom a labour perspective, two major factors hamper formalisation: a) the lack of jobs in the official economy and high unemployment rates and b) some disincentives for engaging in formal work stemming from shortcomings of the welfare system. From the perspective of businesses the frequent changes in the tax system, as well as the lack of transparency and impartiality within state institutions need further attention. Enhancing the skills, expertise and powers of tax officials, improving judicial efficiency and ensuring greater independence of inspectors are some key objectives in the fight against undeclared work. Auditing and arrears collection efficiency and the investigative capacity of the tax administration should be further improved. Socio-cultural factors such as trust in public institutions and the perceived fairness of official rules and norms have a significant effect on tax morale and voluntary compliance. It seems that a significant proportion of taxpayers do not see a clear link between paid taxes and received benefits, which has resulted in a wide approval of disobedience with official rules. Therefore, all imminent efforts to eradicate undeclared work should put the improvement of the psychological contract between the state and its citizens high on the agenda.Policy approach to tackle undeclared workA number of labour market measures have been implemented in FYR Macedonia in recent years, focused mainly on stimulating employment in the official economy. However, when it comes to tackling undeclared work or the transition towards formal employment, the accent is still predominantly on repression through intensified controls and inspections. Some progress has been achieved in reducing the compliance costs for doing business and easing the tax burden through a number of supply-side measures, such as tax incentives for business, a flat-tax system and tax rate harmonisation, as well as simplified procedures for company registration and paying taxes.

A Politico-Economic Play from a Pre-Modern to a Modern State: The Comparative Case of the Meiji Restoration and the Xinhai Revolution

Economists often identify a reduction in the share of agricultural employment as a quantitative indication of the economic growth of nations. But this process did not occur in earnest in the People’s Republic of China (PRC) until the 1980s and to some extent in Japan until well into the mid-20th century. Were extractive political regimes, commonly regarded as the primary drivers of economic performance, solely responsible for the lateness of these developments? This article deals with this question from a strategic perspective by examining the interactions between the polity and the economy in both countries. It begins by characterizing the complementary nature of the peasant-based economy and the agrarian-tax state in premodern China and Japan. It then describes how endogenous strategic forces evolved from among the intermediate organizations in each country to challenge the incumbent dynastic ruler in response to the commercialization of the peasant-based economy on one hand and the fiscal and military weakening of the agrarian-tax state on the other. The article then introduces a three-person game model between a ruler and two challenging organizations, derive conditions for multiple equilbria and their comparative static. The analytical results help to identify the endogenous strategic forces that led the Meiji Restoration and the Xinhai Revolution to move from a premodern state of play to nation-state building and modern economic regimes in each country.

Economic and Political Transitions from Premodern to Modern States in the Meiji Restoration and Xinhai Revolution: A Strategic Approach

Economists often identify a reduction in the share of agricultural employment as a quantitative indication of the economic growth of nations. But this process did not occur in earnest in the People’s Republic of China until the 1980s and to some extent in Japan until well into the mid-20th century. Were extractive political regimes, commonly regarded as the primary drivers of economic performance, solely responsible for the lateness of these developments? This paper deals with this question from a strategic perspective by examining the interactions between the polity and the economy in both countries. It begins by characterizing the complementary nature of the peasant-based economy and the agrarian-tax state in premodern China and Japan. It then describes how endogenous strategic forces evolved from among the intermediate organizations in each country to challenge the incumbent dynastic ruler in response to the commercialization of the peasant-based economy on one hand and the fiscal and military weakening of the agrarian-tax state on the other. The paper then introduces a three-person game model between a ruler and two challenging organizations, and derives conditions for multiple equilbria and their comparative static. The analytical results help to identify the endogenous strategic forces that led the Meiji Restoration and the Xinhai Revolution to move from a premodern state of play to nation-state building and modern economic regimes in each country.

Analisis Kemiskinan Menggunakan Model Panel Spasial Statik

The purpose of this research is to study the effects of GDP, population, employment of junior high school graduated, employment shares of agriculture, industry, trading and services to the number of poor people in Central Java Province. The method used to this modeling is spatial modeling. The results of research show that when GDP, employment shares of industry, trading and services are increase, the number of poor people is decrease. However, when the population, employment share of agriculture and employment of junior high school graduated are increase, the number of poor people is increase. Based on these findings there are some policies should be implemented to reduce the number of poor people, such as improvement of economic growth, improvement of education, controlling the population and employment transformation from agricultural sector to industry, trading and services sectors.

De-agriculturalization as a result of productivity growth in agriculture

This paper explores the secular decline in the employment share in agriculture as a result of productivity growth in the agricultural sector. I study an equation that states that employment share in agriculture is determined by the subsistence constraint and productivity in agriculture. Given the calibrated value for subsistence level of consumption in agriculture, labor productivity in this sector implies a share of employment in agriculture in the model that turns out to be very close to the data for a variety of countries between 1963 and 2005.

Youth Unemployment, Terrorism and Political Violence, Evidence from the Israeli/Palestinian Conflict

AbstractThis paper analyzes the relationship between youth unemployment and Palestinian violence. First a qualitative explanation of the underlying mechanism is given. Eventually, empirical results suggest that there is a positive association between the growth rate of youth unemployment and the brutality and incidence of violence, proxied by the numbers of victims, and incidents. Results also show that: (i) there is a negative association between the added value in the agricultural sector and both measures of violence; (ii) there is a positive association between the share of employment in agriculture and violence; (iii) there is a negative association between manufacturing added value and brutality of incidents. Results also suggest that male youth unemployment rather than female unemployment helps to explain Palestinian violence.

Impacts of the global financial and economic crisis on the agro-food industry and rural livelihoods in Serbia

Sixty-five per cent of the Serbian land area is agricultural and 55% of the population is rural.Agriculture share of GDP is more than 10% and about 47% of the rural labour force deals with agriculture. The aim of this work is to analyse the impacts of the global financial and economic crisis on the Serbian agro-food sector and rural communities. Measures introduced, mainly by public institutions, for relieving the consequences of the crisis are presented and discussed. Easily accessible yet high quality data from the central Office of Statistics in Serbia and specialized literature have been used. Impacts have been assessed by analyzing and discussing the trends of many socio-economic indicators. The crisis has had general impacts on the Serbian economy (low GDP growth, unemployment increase, price volatility, purchasing power decrease, etc.). Due to the crisis growth in agricultural production has been very low (0.1% in 2009). Agro-food exports decreased dramatically in 2008. About 9000 agricultural jobs were lost in 2008 and 2009. Reduced exports and lower domestic demand impacted negatively on agricultural commodity prices and agricultural household incomes.Access to credit became more difficult especially for small producers. However, agriculture is still a very important safety net. Agricultural employment share has increased both for men and women. The importance of agriculture is even higher if we consider the “grey agricultural economy”. To mitigate the crisis effects, the Government provided subsidies to rural people and will adopt the National Strategic Plan and Programme for Rural Development. Nevertheless, public institutions - in partnership with private, civil society and international organisations - should improve rural producers’ access to market information and credits and foster investments in rural areas including non-agricultural ones and those aiming at improving physical capital.

STRUCTURAL CHANGE IN A SMALL OPEN ECONOMY: AN APPLICATION TO SOUTH KOREA

AbstractThis paper develops a dynamic general equilibrium model and studies structural change in a small open economy with two tradable sectors, agriculture and manufacturing, and a non‐tradable sector, services. In addition to obtaining results for a falling employment share of agriculture and a rising share of services, we demonstrate analytically the hump‐shaped share of manufacturing by identifying two countervailing effects: the productivity effect and the Balassa–Samuelson effect. The first effect, arising from differential rates of productivity growth among sectors, increases the share of manufacturing; the second effect, together with low rates of substitution between products, enhances the service sector and eventually draws labour from the manufacturing sector. At the aggregate level, however, the economy maintains a constant rate of growth. We calibrate the model with data from South Korea and find that the calibration fits the country's historical path of structural change.

Increasing Share of Agriculture in Employment in the Time of Crisis: Puzzle or Not?

In the first quarter of 2008, along with the beginning of the crisis, the employment share of agriculture in Turkey deviated from its long-run trend and started to rise. Both the timing and the direction of the change caused a public debate seeking an explanation of this phenomenon. Getting attention in the debate is the fact that labor productivity in agriculture has been declining since that quarter. How much of the increase in agricultural employment can be explained by the secular changes in its productivity? To answer this question, we use a multi-sector general equilibrium model in which employment share in agriculture is determined solely by the subsistence constraint and labor productivity in agriculture, where sectoral productivity growth rates are treated as exogenous. The model accounts for more than 90 percent of the decline in the agricultural employment share between 2000:Q2 and 2010:Q3. The model is also able to generate the increase in agricultural employment since 2008:Q1, although it slightly overpredicts the agricultural employment share. The model also predicts the sectoral allocations of labor in non-agricultural activities during the sample period. A detailed analysis of the driving forces of the growth in agricultural productivity is needed, since it lies at the heart of the secular changes in employment shares in Turkey.

Structural Change Out of Agriculture: Labor Push versus Labor Pull

A declining agricultural employment share is a key feature of economic development. Its main drivers are: improvements in agricultural technology combined with Engel's law release resources from agriculture (“labor push”), and improvements in industrial tech nology attract labor out of agriculture (“labor pull”). We present a model with both channels and evaluate the importance using data on 12 industrialized countries since the nineteenth century. Results suggest that the “pull” channel dominated until 1920 and the “push” channel dominated after 1960. The “pull” channel mattered more in countries in early stages of the structural transformation. This contrasts with modeling choices in recent literature. (JEL E23, N10, N53, O10, O47).

Why is the Polish farm sector still so underdeveloped?

This article presents a comprehensive review of the Polish farm sector. The main objective is to analyse the causes of its backwardness and slow development. Low remuneration of farm work and the resultant low profitability are the largest problems of many farms. Several causes of the low profitability are evaluated. We show that all relevant causes are closely interrelated and that the extraordinarily high labour intensity has the largest impact. Subsequently, we analyse several causes of the extremely large share of agricultural employment in the Polish economy. Low skills of farm workers, the poor performance of the land market and the high level of subsidisation of the social security system for farmers (KRUS) are identified as the most important causes. Finally, some policy recommendations are given.

Trade and the Diffusion of the Industrial Revolution

This paper proposes a model to describe the evolution of real gross domestic product (GDP) in the world economy that is intended to apply to all open economies. The parameters of the model are calibrated using evidence from Sachs and Warner on economies classed as open, from Parente and Prescott on economies that have successfully begun to develop, and from Kuznets and the World Bank on the employment share of agriculture in various times and places. The theory predicts convergence of the income levels and growth rates in the open economies and has strong but reasonable implications for transition dynamics. (JEL F41, O33, O47)

Is Poland the Next Spain?

We revisit Western Europe’s record with labour-productivity convergence, and tentatively extrapolate its implications for the future path of Eastern Europe. The poorer Western European countries caught up with the richer ones through both higher rates of physical capital accumulation and greater total factor productivity gains. These (relatively) high rates of capital accumulation and TFP growth reflect convergence along two margins. One margin (between industry) is a massive reallocation of labour from agriculture to manufacturing and services, which have higher capital intensity and use resources more efficiently. The other margin (within industry) reflects capital deepening and technology catch-up at the industry level. In Eastern Europe the employment share of agriculture is typically quite large, and agriculture is particularly unproductive. Hence, there are potential gains from sectoral reallocation. However, quantitatively the between-industry component of the East’s income gap is quite small. Hence, the East seems to have only one real margin to exploit: the within-industry one. Coupled with the fact that within-industry productivity gaps are enormous, this suggests that convergence will take a long time. On the positive side, however, Eastern Europe already has levels of human capital similar to those of Western Europe. This is good news because human capital gaps have proved very persistent in Western Europe’s experience. Hence, Eastern Europe does start out without the handicap that is harder to overcome.

Impact of agricultural sector on the economic situation of NUTS III regions in the Czech Republic

In all developed economies of the world there was, in the past, a significant decrease in the share of agriculture with regard to the Gross Domestic Product (GDP) and employment. However, it is still possible to find considerable differences between individual countries as well as between regions. The income of agricultural workers is traditionally lower, which subsequently leads to an outflow of population from the country into cities, and to further deterioration of the demographic and economic situation of the rural population. As adequate production of food and food self-sufficiency have been among the strategic priorities of national governments, macroeconomic policies make efforts to support agricultural production both at the national and international level. Therefore, the Common Agricultural Policy has been one of the oldest policies of the European Communities. However, this support increasingly deviates from direct support of production towards harmonic development and diversification of activities in rural regions. With regard to these facts, the authors attempt to identify the particular causal relations between selected indicators at the level of territorial units NUTS III – the regions of the Czech Republic, and to verify the actual existence or non-existence of these relations. Noticeable differences between regions have been found, measured by the share of the agricultural sector in the regional GDP and employment. Subsequently, the authors have identified a dropping tendency between the share of agricultural employment and average income. On the other hand, no relations of dependency have been found between the GDP and agricultural employment and registered unemployment. Neither has the relation between agricultural employment and the GDP per inhabitant been identified as statistically significant. However, there is a high degree of dependence between the share of agricultural employment and the GDP per inhabitant generated in the agricultural sector, between the share of the country population (population density) and the GDP per inhabitant generated in the agricultural sector, and finally between the population density and the GDP generated by the agricultural sector in the particular region (Figures 6, 7, 8 and 9). It can be derived from these facts that their economic structure and demographic situation determine the variability among regions. In the future, these regions should receive aid targeted at the development of rural regions. Identification and statistical evidence of the problems of agriculturally-oriented regions is an important prerequisite for drawing funds from the European Communities programmes and for the establishment of effective macroeconomic policy at the national level. However, despite all the conclusions given above, it can be stated that at the present time agriculture apparently neither contributes to greater unemployment nor it lowers the efficiency of the economy measured by the region’s GDP.