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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:The Agricultural Minimum Wage and Wheat Production in Morocco (1971-89)
Author:Azam, Jean-PaulISNI
Periodical:Journal of African Economies
Geographic term:Morocco
Subjects:minimum wages
Economics and Trade
Agriculture, Natural Resources and the Environment
External link:https://jae.oxfordjournals.org/content/1/2/171.full.pdf
Abstract:This paper analyses theoretically and econometrically the effect of the agricultural minimum wage, called the SMAG, on wheat production in Morocco. The theoretical analysis shows the positive role which the minimum wage can play when the employers have some monopsony power on the labour market. By offsetting this monopsony power over a given range, the minimum wage increases employment and wage earner income if it is higher than the level which would be chosen freely by the monopsony. Insofar as it is among agricultural labourers that the poorest people can be found in LDCs, this allows poverty to be effectively alleviated by removing one distortion. This idea is applied to the case of wheat output in Morocco over the period 1971-1989. The resulting econometric equation passes a large number of tests. It positively links wheat production to the real market price of wheat, the real value of the SMAG, and the real price of sunflower. The SMAG also has indirect effects on wheat output through its negative impact on the market price: by increasing supply, it entails ceteris paribus a price fall. But, according to the estimated elasticities, the net effect remains positive. Bibliogr., notes, ref., sum.