Working Paper: CEPR ID: DP15110
Authors: Tommaso Porzio; Federico Rossi; Gabriella Santangelo
Abstract: We show that the global human capital increase during the 20th-century contributed to structural transformation. We document that almost half of the decline in aggregate agricultural employment was driven by new birth cohorts entering the labor market. We use data on educational attainment and compile a comprehensive list of policy reforms to interpret the differences in agricultural employment across cohorts. We find that the increase in schooling led to a sharp reduction in the agricultural labor supply by equipping younger cohorts with skills more valued out of agriculture. Interpreted through an equilibrium model of frictional labor reallocation, these facts imply that human capital growth accounts for about 20% of the global decline in agricultural employment.
Keywords: No keywords provided
JEL Codes: J24; J43; J62; L16; O11; O14; O18; O41; Q11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increase in schooling (I21) | reduction in agricultural labor supply (J43) |
| faster increases in schooling (I21) | faster declines in cohort effects in agricultural employment (J43) |
| school construction program in Indonesia (L74) | less likely to be employed in agriculture (J43) |