Shifting Fields: Determinants of Agricultural Employment in Next-Tier Emerging Economies

Abstract

This study examines the determinants of agricultural employment in Next Tier Emerging Economies (Argentina, Bangladesh, Chile, Colombia, Egypt, Iran, Iraq, Malaysia, Pakistan, Peru, Philippines, Poland, Saudi Arabia, South Africa, Thailand, and Vietnam) for the period 1995–2019. These countries, characterized by their transitional economies and significant agricultural sectors, represent a critical segment of global development as they navigate structural shifts from agrarian-based systems to more diversified economies. In the processes of structural transformation, economic growth, and social development, the share of agriculture in employment also stands out as an important indicator. Using Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) methods, the analysis reveals that GDP per capita, average years of schooling, and mechanization (measured as machinery per unit of agricultural land) have significant negative effects on the share of agricultural employment in total employment. Conversely, the value added from agricultural production positively affects on agricultural employment. These findings are important for understanding the interaction between agricultural productivity, economic development, educational attainment, and technological advancement in shaping agricultural labor dynamics, offering significant insights for policy design. In this context, policies could address rural labor displacement caused by mechanization, promote sustainable agricultural productivity, and balance rural education with job creation to alleviate urban migration pressures. This study contributes to a better understanding of structural transformation and labor market shifts within the context of emerging economies.