Does agriculture contribute to economic growth? Some empirical evidence

Abstract

This paper augments the Solow - Swan model of economic growth to include the share of the labour force working outside the agricultural sector as a labour augmenting variable in the aggregate production function. The cross-country empirical results suggest that transferring labour from the agricultural sector to other sectors of the economy is associated with economic growth. This result is robust to using instrumental variables to control for the potential endogeneity of the relative size of the agricultural labour force.