Frederick Noack

development and international economics seminar
online

Frederick Noack

University of British Columbia
Rural-urban migration and the organization of agriculture
Joint with
Olivier Deschenes, Raahil Madhok, Mushfiq Mobarak
Date(s)
Friday, June 4 2021| 4:00pm to 5:15pm
Contact(s)

Timothée Demont: timothee.demont[at]univ-amu.fr
Eva Raiber: eva.raiber[at]univ-amu.fr

Abstract

The low productivity of agriculture in developing countries is commonly explained by the oversupply of rural labor and lack of modern agricultural technologies. While some agricultural technologies are labor augmenting, many others are land augmenting. We use detailed household panel data from India to estimate the impact of rural-urban migration on technology adoption, food production, and the spatial distribution of agriculture. We focus on technologies such as fertilizer, modern crop varieties and irrigation, which are highly relevant for agricultural productivity but may be complementary to rural labor. Rural-urban labor migration reduces agricultural technology adoption in India, in stark contrast to the developed world experience where mechanization replaced labor in the 20th century. This finding is largely driven by technology divestment on larger farms that are more labor constrained and less liquidity constrained. We establish these results with three decades of population and agricultural census data. As urbanization gathers pace in India, our findings do not imply that food will become scarce: We show that the rural workforce is growing despite rural out-migration and that there is spatial redistribution of production to districts with less out-migration.