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Keywords:

  • relative efficiency;
  • hired labour;
  • family labour;
  • marginal product;
  • production function;
  • labour market;
  • agriculture;
  • Bangladesh

Abstract

In Bangladesh, labour supply is abundant, but land for cultivation is shrinking mainly because of growing human settlement and urbanisation with a very high population density. This study examines whether labour use is efficient in Bangladesh agriculture and analyses the relative efficiency of hired and family labour for three crop seasons. Production functions are estimated using data collected by International Rice Research Institute on expenditures of agricultural inputs and returns on investment from a nationally representative sample of 1928 farm households from all 64 districts of Bangladesh. Results show that family labour is more productive than hired labour in Bangladesh agriculture, which has important policy implications for the rural labour market. Copyright © 2013 John Wiley & Sons, Ltd.