EMPLOYMENT AND COMPENSATION IN AGRI-FOOD VALUE CHAINS: A MULTINATIONAL INPUT-OUTPUT ANALYSIS
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Agri-food value chains (AVC) have broad social and economic effects on wealth distribution and incomes, quality of life, working conditions and worker well-being, and on the environment. They affect a wide range of individuals either directly involved in the production food outputs, intermediate actors, or food consumers. As economies develop, AVC intermediaries increasing dominate their food production systems. As prior research mainly focuses on upstream farmers and downstream consumers of final food products, we seek to further understand the intermediate stages of AVCs. Using input-output methodology, we estimate the quantities of labor either directly employed by AVC industries or indirectly supporting AVC activities and their annual average compensation per worker. We find that the wholesale trade and retail trade industries employ the greatest share of labor linked to food consumed at home while the accommodations and food services industry employs the greatest share of labor linked to food consumed away from home. From multivariable regression analysis, we find that employment in the farm sector declines and employment in other intermediate stages of the AVC rise as real incomes grow. Indirect workers are better compensated than direct workers on average, however, the gap in salaries between workers directly employed by AVC industries and workers indirectly supporting AVC activities decreases as real incomes grow. Our results suggest that there is a migration of labor from the farm and food services sector to other stages in the AVC and that there is greater labor substitutability between direct and indirect workers as economies develop.
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Supplemental file(s) description: Input, Output Data - Stata and SAS code .