Food Security and Marginal Productivity of Labor in Jordan

Objectives: The primary goal of this study is to explore the relationship in the Jordanian economy between the marginal productivity of labor and the level of food security. Additionally, the study estimates the production function in the Jordanian economy.
Methods:  The estimation relied on the Cobb-Douglas production function using the Autoregressive Distributed Lag (ARDL) model. Subsequently, the marginal productivity of labor (MPL) was estimated by partially differentiating the production function with respect to labor. The marginal productivity of labor for each year from 2001 to 2019 was calculated based on the values of capital formation and labor compensation for each year.
Results: The estimation results indicated that the Jordanian economy is labor-intensive, with the elasticity of production for labor being approximately 0.64, compared to the elasticity of production for capital, which was about 0.38. Additionally, the results revealed that the error correction model (ECM) coefficient equals (-0.3678), suggesting that short-term deviations in the relationship are adjusted back to a long-term equilibrium path within approximately 2.72 years. Furthermore, the analysis showed that if the level of food security decreased to 87.3%, the marginal productivity of labor would drop to zero.
Conclusion: The study recommends the development of a comprehensive national food security strategy, along with reforms in the labor market that encourage investment in high-wage sectors and the qualification of national labor to work in these sectors. This would contribute to enhancing food security and the marginal productivity of labor.