IMF Working Papers

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

By Eugenio M Cerutti, Yiliang Li

August 20, 2021

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Eugenio M Cerutti, and Yiliang Li. The Agricultural Exodus in the Philippines: Are Wage Differentials Driving the Process?, (USA: International Monetary Fund, 2021) accessed November 13, 2024

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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:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2021/220

  • Stock No:

    WPIEA2021220

  • ISBN:

    9781513590097

  • ISSN:

    1018-5941