Wages, Human Capital, and Barriers to Structural Transformation
American Economic Journal: Macroeconomics
vol. 10,
no. 2, April 2018
(pp. 1-23)
(Complimentary)
Abstract
We document for 13 countries ranging from rich (Canada, United States) to poor (India, Indonesia) that average wages are considerably lower in agriculture than in the other sectors. Moreover, agriculture has less educated workers and lower Mincer returns. We view these findings through the lens of a multi-sector model in which workers differ in observed and unobserved characteristics and sectors differ in their human-capital intensities. We derive expressions for the implied barriers to the reallocation of labor out of agriculture. We find that in our sample these barriers are considerably smaller than what the macro-development literature has argued.Citation
Herrendorf, Berthold, and Todd Schoellman. 2018. "Wages, Human Capital, and Barriers to Structural Transformation." American Economic Journal: Macroeconomics, 10 (2): 1-23. DOI: 10.1257/mac.20160236Additional Materials
JEL Classification
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
- J43 Agricultural Labor Markets
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
- Q10 Agriculture: General
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