Education and Factor Bias in Agriculture and Related Industries

The number of hours devoted to value-added output in the NAICS sector Agriculture, Forestry, Fishing and Hunting is increasingly supplied by individuals with advanced schooling. Consistent with hypotheses of a positive relationship among technology development, adoption, and dissemination and a skilled workforce, we find that the composition of the workforce is closely aligned with measures of the state of technology and with labor saving biases resulting from technical change. The changing composition of the workforce and technical change have driven an average wedge of 31% between reported wages W and wages augmented by the state of technology W*. Reported labor compensation in the sector was about $89 billion in 2010, with an average wage index of 110.9. The augmented labor wage index in 2010 was about 68.7, a loss of about 38%, whereas capital price increased from 121.9 (PC) to 196.7 (PC*).