Title Wage gaps and development : lessons from U.S. history / prepared by Alex Mourmouras and Peter Rangazas

Published [Washington, D.C.] : International Monetary Fund, IMF Institute, ©2007

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Description 1 online resource (45 pages) : illustrations Series IMF working paper, 2227-8885 ; WP/07/105 IMF working paper ; WP/07/105. Summary During the course of development, wages and labor productivity are much higher in the nonfarm sectors of the economy than in agriculture. In this paper, we examine the sources and consequences of wage and productivity gaps in the U.S. from 1800 to 2000. We build a quantitative general equilibrium model that closely matches the two-century long paths of farm and non-farm labor productivity growth, schooling, and fertility in the U.S. The family farm emerges as an important institution that contributes to differences in wages and labor productivity. Income from farm ownership compensates farm workers for the relatively low labor productivity and wages earned in agriculture. Farm ownership, along with the higher cost of raising children off the farm, generated a two-fold gap in labor productivity across the farm and nonfarm sectors in the 19th century US. Consequently, the reallocation of labor from farming to industry raised the average annual growth rate of output per worker by about half a percentage point over the 19th century. The paper also draws some lessons from the quantitative analysis of U.S. economic history for currently developing countries Bibliography Includes bibliographical references (pages 42-45) Notes Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL Print version record Subject Wages and labor productivity -- United States -- Econometric models Farm income -- United States -- Econometric models Economic development -- United States -- Econometric models Economic development -- Econometric models Economic history Farm income -- Econometric models Wages and labor productivity -- Econometric models SUBJECT United States -- Economic conditions -- Econometric models. http://id.loc.gov/authorities/subjects/sh85140028 Subject United States Form Electronic book Author Rangazas, Peter, 1956- author. IMF Institute. International Monetary Fund. ISBN 1283518562 9781283518567 145191122X 9781451911220

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