This webpage is an information platform around the ESRC-DFID grant entitled “Agricultural Misallocation, Occupational Choice and Aggregate Productivity – The Role of Insecure Land Rights and Missing Financial Markets”.
Jan Grobovsek (PI), assistant professor at the University of Edinburgh [www]
Charles Gottlieb, assistant professor at the University of St. Gallen [www]
Philipp Kircher, professor at the University of Edinburgh [www]
In most of the least developed countries (LDCs) relative labour productivity in agriculture – compared to non-agriculture – is extremely low in relation to more advanced economies. It is low in real terms (i.e., sectoral physical output per labour input), which is indicative of agriculture being subject to extreme inefficiencies vis-à-vis non-agriculture. And it is low in nominal terms (i.e., sectoral value-added per labour input), which is indicative of massive transaction costs associated with moving labour away from agriculture. Moreover, a large fraction of the workforce in LDCs is active precisely in agriculture, rendering that sector key in understanding the order of magnitude in income differences across the world.
The general aim of our research proposal is to measure the extent to which these phenomena are due to the misallocation of productive resources. Essentially, we view low real agricultural productivity as resulting from misallocation of resources – most specifically land – within the agricultural sector. We view low nominal agricultural productivity as resulting from misallocation of resources – most specifically labour – across the agricultural and non-agricultural sectors.