Agriculture and aggregate productivity: A quantitative cross-country analysis
A decomposition of aggregate labor productivity based on internationally comparable data reveals that a high share of employment and low labor productivity in agriculture are mainly responsible for low aggregate productivity in poor countries. Using a two-sector general-equilibrium model, we show that differences in economy-wide productivity, barriers to modern intermediate inputs in agriculture, and barriers in the labor market generate large cross-country differences in the share of employment and labor productivity in agriculture. The model implies a factor difference of 10.8 in aggregate labor productivity between the richest and the poorest 5% of the countries in the world, leaving the unexplained factor at 3.2. Overall, this two-sector framework performs much better than a single-sector growth model in explaining observed differences in international productivity.
Year of publication: |
2008
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Authors: | Restuccia, Diego ; Yang, Dennis Tao ; Zhu, Xiaodong |
Published in: |
Journal of Monetary Economics. - Elsevier, ISSN 0304-3932. - Vol. 55.2008, 2, p. 234-250
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Publisher: |
Elsevier |
Saved in:
Online Resource
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