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Abstract

This paper analyzes the labor market in rural areas of Chile. The methodology models labor participation decisions in seven employment categories, and estimates the determinants of income levels. It is found that asset endowment, economic connectivity and a favorable macroeconomic context influence the dynamism of rural labor markets, decreasing the relative distances and the capability to overcome entry barriers to higher salary jobs. It is proposed that rural policies should promote investments in education and road infrastructure, and consider the dynamism of the labor market in the non agricultural sector as well as in the agricultural sector.

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