The agricultural sector plays an important and a vital role in achieving the economic growth, furthermore, the labor input is considered one of the most important inputs in the economy, especially in the agricultural sector, which contribute in increasing production. Achieving the economic efficiency depends on the efficient use of resources, i.e., labor, that interacts with the other inputs to determine the optimal combination from inputs within the production process. Due to the prevailing economic relations among inputs, especially, labor and capital, the objective of this study, is to explore, the role and effect of technological change on demand of the Egyptian agricultural labor, the disguised agricultural unemployment, that affects deviation the actual use of labor from the optimum level, that leads to achieve the optimal and maximum efficiency in the Egyptian agricultural sector. To achieve and these objectives, the study estimated linear production functions, i.e., Cobb-Douglas, restricted Cobb-Douglas, Solow, Transcendental Logarithmic Production Functions. Also estimated nonlinear production functions, i.e., Constant Elasticity of Substitution Cobb-Douglas, Generalized Elasticity of Substitution Cobb-Douglas, Quadratic Constant Elasticity of Substitution Cobb-Douglas, Variable Elasticity of Substitution Cobb-Douglas Production Functions. The study detected and correction the econometric problems that affect the estimates , i.e., autocorrelation, heteroscedasticity, non normality of the error term, and multicollinearity. The study obtained data from different sources, through the period (1985-2004). The results of the study indicated that, there is efficiency of using agricultural labor input, where the labor productivity exceeds the labor farm wage, also there is decreasing in the return to scale, disguised unemployment does not exist in the Egyptian agricultural sector, also there is a substitution between labor and capital, tends to labor, as a result of labor intensity, that exhibits and reflects that the available technology in Egypt is labor intensive, and lead to increase the demand of human labor input. Finally, the study recommended that, technological tools non intensive capital should be applied, to encourage the demand on labor, investing in the agricultural projects that capture human labor, developing education and training in agricultural sector, and increasing wages that reflect the real value of marginal product of labor and his productivity to achieve the efficiency of human labor input in the Egyptian agricultural sector.
