Nicholas Y. Li
Evans Hall, #3880
University of California
Berkeley, CA 94720-3880
NBER Working Papers and Publications
|March 2017||Reevaluating Agricultural Productivity Gaps with Longitudinal Microdata|
with Joan Hamory Hicks, Marieke Kleemans, Edward Miguel: w23253
Recent research has pointed to large gaps in labor productivity between the agricultural and nonagricultural sectors in low-income countries, as well as between workers in rural and urban areas. Most estimates are based on national accounts or repeated cross-sections of micro-survey data, and as a result typically struggle to account for individual selection between sectors. This paper uses long-run individual-level panel data from two low-income countries (Indonesia and Kenya). Accounting for individual fixed effects leads to much smaller estimated productivity gains from moving into the nonagricultural sector (or urban areas), reducing estimated gaps by over 80%. Per capita consumption gaps are also small once individual fixed effects are included. Estimated productivity gaps do not emer...