By M. J. Stabler (auth.)

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Apart from work on the explanatory variables, the agricultural labour market has interested economists because of the effect on the other sectors of the economy. It is argued that the agricultural labour force constitutes a pool of human resources which can be absorbed into industrial sectors and thus contribute to 36 economic growth. D. countries, K. Cowling and D. Metcalf ('Labour Transfer from Agriculture: A Regional Analysis', Manchester School of Economics and Social Studies, Mar 1968) analysed this in conjunction with an examination of the determinants of migration and made observations on both farming and industry in the regions.

Although the problems of analysing technical change are formidable, the inclusion of the rate of adoption increases them. The analysis of what is called the 'diffusion of innovations' studies the time period between the invention of the technique and its application. Innovations have two effects: they reduce costs and change the nature of the process. For example, a new type of milk parlour not only reduces costs, but also changes the technique of milking. The study of the adoption process comes more properly in the province of rural sociology [ 155] than economics, and as a result is viewed by some economists with acute suspicion.

Metcalf has also done work with Cowling on wage determination in agriculture ( see Cowling, Metcalf and Rayner [139]). The most important variables in the supply of labour are seen as the relationship between wages in agriculture and other sectors, the level of unemployment, age, education and variables representing non-income benefits. The demand for labour is a function of ratios of wages to the price of inputs, and wages to the price of outputs. Models of the determination of wages, in addition to including supply and demand variables, have incorporated profits, institutional factors, policy variables and regional variations in the variables.

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