Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Measuring Labor
Productivity for Rural
Workers
Ellen McCullough, University of Georgia
Presentation to RULIS consultation
...
Why Labor Productivity?
• The poor are endowed with labor
• Poverty reduction is strongly associated with
growth in returns to labor and employmen...
As Seen in Research…
• Structural change
• Occupational choices and returns to labor
• Impact Evaluation
• Key outcome alo...
Important types of labor earnings
in developing countries
• Farming self employment
• Self produced or non-traded inputs
•...
Labor Data and the SDGs
𝐿𝐿𝐿𝐿 =
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 𝑡𝑡𝑡𝑡 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿
𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼
• Types of Labor:
• Self Employment ...
Concepts
• ALP (annual): Annual Output per worker
• Requires careful measure of returns to labor
• ALP (hourly): Returns p...
Some Evidence
• Labor inputs differ across activities
• It matters if you look at returns per person per year
vs per hour ...
Per-person labor shares calculations are relatively similar
across data sources
Labor Shares
However, hours based measures offer lower shares than
participation based measures
Labor Shares
… agricultural workers work fewer hours per year
Employment Gaps
Cross-sector productivity differentials are large
… though not as large as national accounts based measures
Micro
gaps
Nat...
Productivity differentials much smaller after
accounting for hours worked
Productivity Gaps
Productivity differentials much smaller after
accounting for hours worked
Productivity Gaps
Prioritizing Data Needs
• Top down (driven by indicator list)
vs
• Bottom Up (driven by data availability)
Focus on what y...
Data Coverage
• SDGs are based on changes in indicators. This requires:
• Time series within countries
• Comparability ove...
From Data to Indicators
• Need a RIGA (or RIGA-like) function!!!
• Generate indicators using scripts from a processed micr...
Indicator List
• Focus on labor inputs (participation, time)
• Focus on labor returns (income, income shares, wages)
• Car...
Additional issues
• Externalities
• Child labor and
foregone education
• Gender and nutrition
• Child care time
• Rethinki...
Measuring Labor Productivity for Rural Workers (Ellen McCullough, Uni Georgia)
Measuring Labor Productivity for Rural Workers (Ellen McCullough, Uni Georgia)
Measuring Labor Productivity for Rural Workers (Ellen McCullough, Uni Georgia)
Upcoming SlideShare
Loading in …5
×

Measuring Labor Productivity for Rural Workers (Ellen McCullough, Uni Georgia)

115 views

Published on

Expert consultation on methodology for an information system on rural livelihoods and Sustainable Development Goals indicators on smallholder productivity and income

7 - 8 December, FAO headquarters

Published in: Education
  • Be the first to comment

  • Be the first to like this

Measuring Labor Productivity for Rural Workers (Ellen McCullough, Uni Georgia)

  1. 1. Measuring Labor Productivity for Rural Workers Ellen McCullough, University of Georgia Presentation to RULIS consultation 8 November, FAO, Rome, Italy
  2. 2. Why Labor Productivity?
  3. 3. • The poor are endowed with labor • Poverty reduction is strongly associated with growth in returns to labor and employment levels • Changing patterns of labor supply are associated with development process (structural change) Why Labor Productivity?
  4. 4. As Seen in Research… • Structural change • Occupational choices and returns to labor • Impact Evaluation • Key outcome along the impact pathway • Efficiency and technology • Understanding labor as major factor of production • Human capital • Understanding heterogeneity in returns to labor • Demographic transitions • Aging of agriculture labor force, unemployed youth in cities • Income smoothing • Livelihood specialization and diversification • Intervention targeting • Understanding when labor is scarce and slack
  5. 5. Important types of labor earnings in developing countries • Farming self employment • Self produced or non-traded inputs • Substitutability hired labor • Auto-consumed or non-traded outputs and inputs • Farming wage employment • Non-farming self employment • Enterprise accounting • Non-farming wage employment Integrating GPS and self-reported measures of land area in household surveys
  6. 6. Labor Data and the SDGs 𝐿𝐿𝐿𝐿 = 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅 𝑡𝑡𝑡𝑡 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼 • Types of Labor: • Self Employment (farm) • Self Employment (non-farm) • Wage Employment (farm) • Wage Employment (non-farm) • Good “numerator” and “denominator” estimates are relevant for all SDGs: • Poverty, Decent work • Hunger, Health, Education, Gender Equality, Water/Sanitation, Energy, Infrastructure, Inequality, Sustainable cities, Sustainable production/consumption Reduced Inequalities Income sources Employment
  7. 7. Concepts • ALP (annual): Annual Output per worker • Requires careful measure of returns to labor • ALP (hourly): Returns per hour worked • Requires careful measure of labor inputs • Marginal revenue product of labor: • Requires estimation of full production function (for farm and/or non-farm enterprise, or the firm demanding labor) • Input use is a selection variable, including (especially) time • Wages may not equal the marginal revenue product of labor Implications: - Measure labor inputs carefully (intensive margin) - Track other inputs, especially human and financial capital
  8. 8. Some Evidence • Labor inputs differ across activities • It matters if you look at returns per person per year vs per hour worked • Estimating marginal labor productivity is not straightforward!!! • But if you want a “full income” approach this is required
  9. 9. Per-person labor shares calculations are relatively similar across data sources Labor Shares
  10. 10. However, hours based measures offer lower shares than participation based measures Labor Shares
  11. 11. … agricultural workers work fewer hours per year Employment Gaps
  12. 12. Cross-sector productivity differentials are large … though not as large as national accounts based measures Micro gaps National Acct Gaps Productivity Gaps National Account Gaps from Gollin et al, 2014
  13. 13. Productivity differentials much smaller after accounting for hours worked Productivity Gaps
  14. 14. Productivity differentials much smaller after accounting for hours worked Productivity Gaps
  15. 15. Prioritizing Data Needs • Top down (driven by indicator list) vs • Bottom Up (driven by data availability) Focus on what you can measure well Generate the best indicators you can with the data you have, given your tolerance for assumptions.
  16. 16. Data Coverage • SDGs are based on changes in indicators. This requires: • Time series within countries • Comparability over time • The more countries the better, but the time dimension is needed • Labor productivity is about people – surveys must represent the population, not only farmers, or “subsistence” farmers • Build on existing survey platforms used for research and indicator tracking • fill gaps strategically • use geolocation for data matching (to lighten the burden) • Livestock and self employment labor are gaps
  17. 17. From Data to Indicators • Need a RIGA (or RIGA-like) function!!! • Generate indicators using scripts from a processed micro dataset • Make assumptions clear (e.g. hours per day) • “Best” aggregate vs comparable aggregate (e.g. recall ag family labor in hours or days) • Valuing family labor and other non-purchased inputs? • Technically need to estimate production functions, this is a serious undertaking. Challenge of net income measures… • Classifying employment (strict vs relaxed). • Want to be ILO compatible • Also want to be appropriate to context
  18. 18. Indicator List • Focus on labor inputs (participation, time) • Focus on labor returns (income, income shares, wages) • Careful with overly prescriptive definitions of employment • Most returns to labor generated through self employment • Underemployment disguised as self employment in farming, services • Is all casual labor precarious? • “Unpaid family labor” only tracked for crop production. • What about non-farm self employment labor? Livestock? Other family labor?
  19. 19. Additional issues • Externalities • Child labor and foregone education • Gender and nutrition • Child care time • Rethinking 24 hour recall measures of water and firewood

×