The allocation of resources between agriculture and non- agriculture is a central decision of a farm household. In this paper we formulate a profit-maximization model in which human capital enhances efficiency through both within-sector effects and across-sector allocation of quasi-fixed inputs....

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...