Specialization , Agriculture , and Cross-Country Productivity Differences

@inproceedings{Lagakos2010SpecializationA,
  title={Specialization , Agriculture , and Cross-Country Productivity Differences},
  author={David Lagakos},
  year={2010}
}
  • David Lagakos
  • Published 2010
—————————————————————————————————– Cross-country labor productivity differences are larger in agriculture and smaller in nonagriculture than in the aggregate. We argue that these sector productivity differences arise when subsistence consumption needs prevent workers in poor countries from specializing in the sector in which they are most productive. We formalize our theory in a generalequilibrium Roy model in which the agents’ preferences feature a subsistence consumption constraint. A… CONTINUE READING
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