Young people’s participation in agricultural activities is dependent on economic viability and opportunity, which should be promoted.Takalign Sakketa Tweet
This study investigates trends and patterns of youth’s labour supply in agriculture using a calculated shadow wage as an alternative to market wages.
Sakketa, T.G. and Gerber, N. (2020), “Rural Shadow Wages and Youth Agricultural Labor Supply in Ethiopia: Evidence from Farm Panel”, Research in Labor Economics, Vol. 48, pp. 61-105.
Shadow wage is a more accurate estimate of labor return and agricultural production in settings where markets are imperfect- such as rural areas. Shadow wage can be weakly equated to the productivity of a household or individual.
Rural wage, labour productivity and economic incentives were used to determine the agricultural supply of individuals. This varied by gender, but overall there is no evidence which suggests that youth on-farm participation is decreasing.
The study is based on household and youth panel survey conducted in Oromia region of households selected for the Ethiopian government’s Agricultural Growth Program (AGP). An econometric approach was applied to the data.
However, the estimation of shadow wage makes assumptions, for example that increasing labor supply equally increases productivity/output. In reality this may be non-linear. Furthermore, working hours were self-estimated by participants, so are liable measurement errors
Ben Levett prepared this research following an interview with Takalign Sakketa.