Discussion paper

DP11248 The Role of Crop Type in Cross-Country Income Differences

Labor productivity and labor share in the agricultural sector are key determinants of living standards across countries. We show that differences in agricultural technology -- the coefficients on factor inputs in the production function -- account for a substantial portion of cross-country differences in agricultural labor productivity, agricultural labor share, and per capita income. In a panel of 100 countries we document differences in technology estimates associated with major crops, and then illustrate the quantitative implications for development. Counterfactually eliminating crop-type technology heterogeneity reduces variance in log income per capita by 25%, and raises the median by 60%.


Eberhardt, M and D Vollrath (eds) (2016), “DP11248 The Role of Crop Type in Cross-Country Income Differences”, CEPR Press Discussion Paper No. 11248. https://cepr.org/publications/dp11248