Global value chains,large-scale farming,and poverty: Long-term effects in Senegal |
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| Institution: | 1. Division of Bioeconomics, Department of Earth and Environmental Sciences, KU Leuven, Celestijnenlaan 200E, 3001 Heverlee, Belgium;2. LICOS – Centre for Institutions and Economic Performance, Department of Economics, KU Leuven, Waaistraat 6, 3000 Leuven, Belgium;1. Dipartimento di Scienze per l’Economia e l’Impresa, Università di Firenze, Via delle Pandette 32, 50127 Florence, Italy;2. Global Governance Programme, European University Institute, Firenze, Via delle Fontanelle 10, 50014 San Domenico di Fiesole, Italy;1. Food and Agriculture Organization of the United Nations, Italy;2. Universitá di Teramo and Food and Agriculture Organization of the United Nations, Italy;3. World Bank, United States;1. Rheinisch-Westfälisches Institut für Wirtschaftsforschung e.V. (RWI), Hohenzollernstr. 1–3, 45128 Essen, Germany;2. Hochschule Rhein-Waal, Faculty of Life Sciences, Marie Curie Strasse 1, 47533 Kleve, Germany;3. Leibniz University of Hanover, Faculty of Economics and Management, Königsworther Platz 1, 30167 Hannover, Germany;2. GIGA German Institute of Global and Area Studies, Institute of African Affairs, Neuer Jungfernstieg 21, 20354 Hamburg, Germany;3. Chair of Development and Cooperative Economics, University of Marburg, Am Plan 2, 35037 Marburg, Germany |
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| Abstract: | This paper presents panel data evidence on the impact of expansion of global value chains and large-scale export-oriented farms in developing countries over almost a decade. We estimate the income effects of wage employment on large-scale farms in the horticultural export sector in Senegal, using data from two survey rounds covering a seven-years period of rapid expansion of the sector. We estimate average income effects as well as heterogeneous income effects, using fixed effects and quantile fixed effects regressions. We find that poverty and inequality reduced much faster in the research area than elsewhere in Senegal. Employment in the horticultural export sector is associated with higher household income and the income effect is strongest for the poorest households. Expansion of the horticultural export sector in Senegal has been particularly pro-poor through creating employment that is accessible and creates substantial income gains for the poorest half of the rural population. These pro-poor employment effects contrast with insights in the literature on increased inequality from rural wage employment. |
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| Keywords: | Globalization High-value supply chains Rural wage employment Quantile regression Panel data Long-term effects |
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