Agricultural Change, Rural Labor Markets, and Forest Clearing: An Illustrative Case from the Philippines

Abstract

This paper studies the links between agricultural employment and upland activities at a tropical forest margin. A model of lowland agricultural production is combined with a model of labor allocation on a representative upland farm to show how labor productivity, agricultural wages, and the returns from upland activities determine rates of forest clearing. Farm level data from the Philippines demonstrate how agricultural intensification––in the form of lowland irrigation development––led to an increase in labor demand, an increase in employment of upland inhabitants, and small but statistically significant reductions in rates of forest clearing. (JEL Q15, Q23)