Agricultural Unskilled Labor Mobility: Does It Matter?

Labor mobility is an important issue in quantitative economic analyses due to its possible implications for the sectoral reallocation of factors of production, output response, prices, and wages. This paper investigates the issue of agricultural unskilled labor mobility from both modeling and empirical perspectives. After discussing the issue from a theoretical perspective, I look into the empirical implications of treating agricultural unskilled labor less than mobile in the context of Turkey-EU agricultural integration. The results indicate that degree of mobility of the agricultural unskilled labor matters. It has certain implications on sectoral reallocations, and accordingly factor returns. The higher the degree of unskilled labor mobility between farm and non-farm sectors, the higher the output response, and the lower the real earnings of unskilled labor in agriculture.