The Agricultural Exodus in the Philippines: Are Wage Differentials Driving the Process?

August 20, 2021

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Format: Chicago

Eugenio M Cerutti, and Yiliang Li. The Agricultural Exodus in the Philippines: Are Wage Differentials Driving the Process?, (USA: International Monetary Fund, 2021) accessed September 19, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Lagging labor reallocations outside agriculture amid sustained low agricultural productivity have been a key feature in the Philippines over the past 15 years. An analysis of the labor adjustments in and out of agriculture shows that a variety of factors have influenced this process. We find that the widening of wage differentials with non-agricultural sectors, improvements in labor market efficiency, and better transport infrastructure are largely associated with growing outflows of labor from agriculture, whilst the lack of post-primary education and the presence of agricultural clusters hinder such outflows. In contrast to the traditional view that agricultural employment outflows are largely driven by productivity differences and wage differentials, our results emphasize the roles of education as well as transport infrastructure in facilitating labor reallocations from agriculture to non-agriculture.

Subject: Agricultural sector, Economic sectors, Education, Employment, Labor, Labor markets, Real wages

Keywords: Agricultural sector, Agriculture performance, Efficiency index, Employment, Global, Job separation, Labor adjustment, Labor markets, Real wage wage differential, Real wages, Time series trend

Publication Details

Pages:

58
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/220
Stock No:

WPIEA2021220
ISBN:

9781513590097
ISSN:

1018-5941

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