Working Paper: NBER ID: w29390
Authors: Tommaso Porzio; Federico Rossi; Gabriella V. Santangelo
Abstract: We document that nearly half of the global decline in agricultural employment during the 20th-century was driven by new cohorts entering the labor market. A newly compiled dataset of policy reforms supports an interpretation of these cohort effects as human capital. Through the lens of a model of frictional labor reallocation, we conclude that human capital growth, both as a mediating factor and as an independent driver, led to a sharp decline in the agricultural labor supply. This decline accounts, at fixed prices, for 40% of the decrease in agricultural employment. This aggregate effect is roughly halved in general equilibrium.
Keywords: human capital; structural transformation; labor reallocation; agricultural employment
JEL Codes: J24; J43; J62; L16; O11; O14; O18; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| human capital growth (J24) | decline in agricultural labor supply (J43) |
| human capital growth (J24) | transformation of labor force (J21) |
| educational attainment (I21) | sectoral choices (O14) |
| human capital growth (J24) | reallocation of employment across sectors (J68) |
| cohort-level characteristics (C92) | decline in agricultural employment (J43) |