Environmental Quality and Sustainable Agriculture: A Long-Run Cointegration Analysis of Labor Productivity in Ethiopia

This study examined the influence of environmental quality on agricultural labor dynamics in Ethiopia from 1990 to 2023. The Fully-Modified Ordinary Least Squares (FMOLS) and the Dynamic Ordinary Least Squares (DOLS) methods were utilized. To check the robustness, used the Canonical Cointegration Regressions (CCR) method. To provide a more comprehensive insight, the study also employed the Granger causality approach to detect the direction of the relationships. The findings revealed that environmental quality, measured as ecological footprint, and urbanization have a negative long-term effect on agricultural labor dynamics, measured as agricultural output per worker. On the other hand, economic growth, population growth, and primary education have a positive long-term influence on agricultural labor dynamics. Lastly, the study found that bidirectional causality exists between agricultural labor dynamics and economic growth, while unidirectional causality of environmental quality, population growth, urbanization, and primary education with agricultural labor dynamics. These important findings provide crucial information for policymakers, giving a nuanced understanding of the intricate relationships between agricultural labor dynamics and environmental consequences, as well as aiding in the formulation of sustainable strategies that contribute to decent work and economic growth within the framework of the Sustainable Development Goals (SDG 8) in Ethiopia.