Labor Absorption and Demand in Brazilian Agriculture
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This paper examines the determinants of labour demand by the Brazilian farm sector (m particular
the role of factor prices, production levels, land use, tractor inventories, and land concentration) to aid
understanding of the causes of low rates of farm labour absorption. The research was conducted within the
framework of neoclassical models of factor demand, to which the Krishna model of employment decompos1tion was
added. The results show that the pos1ttve effects due to neutral technical change and output growth are cancelled
by negative effects due to high wages, input subsidies, and rapid expansion of the farm tractor fleet. Inferences for
policy and research are drawn.