An endogenous growth model is developed to
explore the effect of work and income sharing (WIS) on economic growth and
welfare in a developing rural economy. The practice of WIS is a mechanism which
converts incremental diversity of risk into volatility reduction and overall
welfare gain. However, the effect on economic growth is sector specific. WIS in
the intermediate goods sector has a pro-growth effect through higher investment
returns while in the agricultural sector it has an anti-growth effect through
lower precautionary savings. WIS also decreases the level of regional government
subsidies needed to achieve the optimal growth rate.
Pray. C.E. and Fuglie, K.O. (2001) Private Investment in Agricultural Research and International Technology Transfer in Asia. Agricultural Economics Report No. 805, US Department of Agriculture, Washington DC.
Vargas-Lundius, R. and Lanly, G. (2007) Migration and Rural Employment. Proceedings of the Round Table on Migration and Rural Employment in Conjunction with the Thirtieth Session of IFAD’s Governing Council, February 2007.
Spielman, D.J. and Von Grebmer, K. (2004) Public-Private Partnerships in Agricultural Research: An Analysis of Challenges Facing Industry and the Consultative Group on International Agricultural Research. Environment and Production Technology Division Discussion Paper No. 113, International Food Policy Research Institute, Washington DC.