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Agrifood value chain employment and compensation shift with structural transformation
Jing Yi1, Shiyun Jiang2, Dianna Tran3
1Department of Agricultural and Applied Economics, University of Wisconsin-Madison, Madison, WI, USA.
Nature Food
|September 10, 2025
Summary
Structural transformation sees workers leave farming but stay within agrifood value chains. As economies grow, downstream jobs offer better pay, especially for women in retail, while men move to midstream roles, widening the gender pay gap.
Area of Science:
- Agricultural Economics
- Development Economics
- Labor Economics
Background:
- Traditional structural transformation models focus on labor moving out of agriculture.
- These models overlook worker migration within agrifood value chains.
- Understanding intra-chain labor dynamics is crucial for accurate economic analysis.
Purpose of the Study:
- To analyze labor reallocation within global agrifood value chains during structural transformation.
- To investigate how worker compensation and gender disparities change with economic development.
- To identify key drivers of labor shifts beyond primary agricultural production.
Main Methods:
- Decomposition of multiregional input-output tables into industry- and country-specific labor value-added estimates.
- Matching value-added data with employment figures to calculate average worker compensation.
- Analysis of global economic data from 1993-2021.
Main Results:
- Labor exits primary agricultural production as national incomes rise.
- Downstream agrifood sectors maintain employment share and offer higher compensation than farming.
- Women disproportionately shift to retail/food services, men to midstream jobs, increasing gender pay inequality.
- Employment shifts correlate with per capita income growth, not agricultural productivity.
Conclusions:
- Structural transformation involves significant internal migration within agrifood value chains.
- Economic growth drives job creation in downstream sectors, improving overall compensation.
- Policy interventions may be needed to address increasing gender pay inequality within value chains.
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