Labor Absorption and Demand in Brazilian Agriculture

This paper examines the determinants of labour demand by the Brazilian farm sector (m particular the role of factor prices, production levels, land use, tractor inventories, and land concentration) to aid understanding of the causes of low rates of farm labour absorption. The research was conducted within the framework of neoclassical models of factor demand, to which the Krishna model of employment decompos1tion was added. The results show that the pos1ttve effects due to neutral technical change and output growth are cancelled by negative effects due to high wages, input subsidies, and rapid expansion of the farm tractor fleet. Inferences for policy and research are drawn.