Wage Growth, Landholding and Mechanization in Agriculture Evidence from Indonesia

This paper examines dynamic patterns of land use, capital investments and wages in agriculture using farm panel data from Indonesia. The empirical analysis shows that with an increase in real wages that prevailed in both agricultural and non-agricultural sectors in rural areas, relatively larger farmers increased the size of operational farm land by renting in land. An increase in real wages has induced the substitution of labor by machines among relatively large farmers. Machines and land are complementary and, consistently, the inverse land-productivity relationship is reversed among relatively large holders.


Issue Date:
2015-06
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/212723
Total Pages:
25
JEL Codes:
J31; Q12; Q15




 Record created 2017-04-01, last modified 2017-08-17

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