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Abstract

Many developing countries are currently experiencing a rapid expansion of supermarkets. New supermarket procurement systems could have important implications for farming and wider rural development. While previous studies have analyzed farm profit and income effects, possible employment effects have received much less attention. Building on data from a recent survey of vegetable farmers in Kenya, in this article a double-hurdle model of hired labor use is developed and estimated. Farmer participation in supermarket channels increases the likelihood of hiring labor by 13% and overall demand for hired labor by 38%. A gender disaggregation shows that positive employment effects are especially pronounced for female hired labor. Given that agricultural wage labor is primarily an activity of low-income households in rural areas, the poor benefit over-proportionally.

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