Education and Technical Efficiency in Pakistan’s Agriculture

It is now well recognized that education expedites the process of growth in an economy. In agriculture, leaving aside the external effects, it affects productivity in two quite distinct ways known as the allocative effect and the worker effect (Welch, 1970). The former centres on beller allocation decisions including adoption and diffusion of new technology whereas the latter relates to a more efficient use of given inputs, i.e. the technical efficiency aspect of production. While the allocative effect is inherently predicated on disequilibrium (created, for example, by a change in technology) (Nelson and Phelps 1966), there is some evidence to suggest that even the worker effect of education is more likely to arise in disequilibrium resulting from technical change (Maack 1981). This is because technical change renders the cultural practices learnt over generations obsolete or inadequate and calls for an adjustment. A more educated farmer is supposed to make the required adjustment more quickly. In this paper I have attempted to test this hypothesis for Pakistan during the green revolution period when the introduction of new crop varieties disturbed the prevailing equilibrium. For this purpose I have used production function analysis and have conducted the analysis for not only the new but also the traditional crops. The results lend support to the hypothesis by showing that the worker effect is more pronounced in the case of new crop varieties as compared to the traditional ones. The paper is divided into three sections. In Section II, I have presented the hypothesis and discussed the methodology used for the analysis. Section III concludes the paper with a discussion of the results.