Full Length Research Paper
Abstract
This paper empirically studies the labor allocation between rural and urban sectors due to economic growth in one of the least developed economies, Pakistan. The paper adopts a time-series analysis from 1980 to 2007, to study the causal impact of sectoral productivities on labor reallocation among sectors. The results indicate that labor productivity in manufacturing induces labor mobility from agriculture to manufacturing. The results also support the view that improvement in labor productivity in the agricultural sector pushes labor allocation to non-agricultural sectors.
Key words: Labor reallocation, sectoral productivity, exports, Pakistan.
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