RT Journal Article
SR Electronic
T1 Can Labor-Market Imperfections Explain Changes in the Inverse Farm Size–Productivity Relationship? Longitudinal Evidence from Rural India
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 239
OP 258
DO 10.3368/le.94.2.239
VO 94
IS 2
A1 Deininger, Klaus
A1 Jin, Songqing
A1 Liu, Yanyan
A1 Singh, Sudhir K.
YR 2018
UL http://le.uwpress.org/content/94/2/239.abstract
AB We use a large national farm panel from India from 1982 to 2008 to show that the inverse relationship between farm size and output per unit of land weakened significantly over time. A key reason was the substitution of capital for labor in response to nonagricultural labor demand. In addition, family labor was more efficient than hired labor in 1982 and 1999, but not in 2008. In line with labor market imperfections as a key factor, separability of labor supply and demand decisions cannot be rejected in the last period, except in villages with very low nonagricultural labor demand. (JEL O13, Q15)