Journal
JOURNAL OF DEVELOPMENT ECONOMICS
Volume 127, Issue -, Pages 133-152Publisher
ELSEVIER
DOI: 10.1016/j.jdeveco.2017.02.007
Keywords
Agriculture; Fertilizer; Structural change; Growth; Green revolution
Categories
Funding
- Bill & Melinda Gates Foundation [OPP44755, OPP1083277]
- Walker Family Foundation
- Ending Rural Hunger project
- Bill and Melinda Gates Foundation [OPP1083277] Funding Source: Bill and Melinda Gates Foundation
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This paper estimates the role of agronomic inputs in cereal yield improvements and the consequences for countries' processes of structural change. The results suggest a clear role for fertilizer, modern seeds and water in boosting yields. We then test for respective empirical links between agricultural yields and economic growth, labor share in agriculture and non-agricultural value added per worker. The identification strategy includes a novel instrumental variable that exploits the unique economic geography of fertilizer production and transport costs to countries' agricultural heartlands. We estimate that a half ton increase in staple yields generates a 14 to 19 percent higher GDP per capita and a 4.6 to 5.6 percentage point lower labor share in agriculture five years later. The results suggest a strong role for agricultural productivity as a driver of structural change.
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