Why is Measured Productivity so Low in Agriculture?
CESifo, Munich, 2015
CESifo Working Paper No. 5484
![](https://cesifo.org/DocImg/cesifo1_wp5484.jpg?c=1689237168)
In poor countries, labor productivity in agriculture is considerably lower than in the rest of the economy. We assess whether this well known fact implies that labor is mis-allocated between the two sectors. We make several observations that suggest otherwise. First, the same fact holds for US states where severe mis-allocation is implausible. Second, the gaps between the marginal value products of agriculture and non-agriculture are considerably smaller when measured through wages than through labor productivities. Third, labor productivity in agriculture is severely mis-measured in the US.
Fiscal Policy, Macroeconomics and Growth