Video: Rural Structural Transformation in Developing Countries (ERC Grant)

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Andre Groeger (UAB and BSE) has always been interested in human development, which led him to conduct field research in Southeast Asia and Sub-Saharan Africa during his PhD. From there, he became curious about how rural communities grow wealthier and develop more complex economies.

His latest project, funded by a Starting Grant from the European Research Council (ERC), focuses specifically on structural transformation in rural communities. Why do so many workers there remain in agricultural jobs? The answer is complex, but it could help improve the lives of millions living in poverty.

Video: Interview with Andre Groeger

The following text is adapted from the video interview with Professor Groeger that was conducted in May 2024.

It is important to understand why so many workers remain in agriculture in developing countries, because rural areas in those countries host large parts of the poor population worldwide. These areas are particularly vulnerable to negative weather shocks, which will become more frequent and severe through climate change. 

Poverty eradication must therefore focus on rural development. From previous studies, we know that pronounced and persistent productivity gaps exist in developing countries, both across space and across industries. Farmers could therefore be better off by diversifying their agriculture activities and/or by taking up new jobs in different sectors.

We seek to identify the factors that impede this. In the project, we explore three key areas using data from Southeast Asia and Sub-Saharan Africa.

Agricultural production

First, we focus on agriculture production. We’re examining how farmers adapt to changes in agricultural market conditions over time.

We aim to pinpoint specific barriers to improving agriculture productivity: technological constraints, such as crop sensitivity; and market frictions, like land regulation.

Labor markets

Second, we focus on labor markets, where we’re analyzing labor reallocation out of agriculture, including domestic labor migration. It’s crucial to understand how workers of various skill levels are employed across sectors to boost productivity and manage structural transformation.

Climate change

Third, we focus on climate change. Here we’re studying how climate change has historically affected farming, adaptation, and labor reallocation. We also simulate the future impact under different emission scenarios and counterfactual policy experiments to understand how climate change will affect structural transformation in the future.

Better understanding can lead to better outcomes

Innovative rural development solutions that foster structural transformation will be critical for improving the livelihoods of the rural populations. We hope our research will contribute to finding these solutions.

Related research by Andre Groeger

This video series is one of the Barcelona School of Economics research initiatives supported by the Severo Ochoa Research Excellence Program (CEX2019-000915-S) through Spain’s State Research Agency (Agencia Estatal de Investigación – AEI).

This research project is funded by the European Union through the European Research Council (ERC). Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Research Council. Neither the European Union nor the granting authority can be held responsible for them.

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