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Labor market behavior of Chinese rural households during transition
| Content Provider | AgEcon Search |
|---|---|
| Researcher | Wang, Xiaobing |
| Abstract | The goal of this study is to assess households’ labor allocation in the wake ofChina’s efforts to develop the rural labor market in a manner that is conductive toits transition to a market economy. Applying the agricultural household model asthe theoretical framework, we help to understand the behavior of rural householdsin the labor market in three different but interrelated contexts: Participationbehavior in hiring labor and supplying off-farm labor, the quantity of hired-labordemand and off-farm labor supply, and the dynamics of rural households’participation in labor markets. The empirical studies are based on micro-level paneldata from Zhejiang province from 1995 to 2002.We first derive a joint model of households’ decisions on hiring labor and supplyinglabor off the farm, with special attention of households that participate in bothmarkets simultaneously. The main result suggests that the decisions to hire laborand supply off-farm labor are jointly made and positively correlated. This supportsthe hypothesis that rural China has a poorly functioning labor market.Next, we estimate a series of hired labor demand and off-farm labor supplyfunctions using the wages of hired labor and off-farm workers as the instrumentedvariables. A household’s labor demand decreases with the increasing wage of hiredlabor, whereas the effect of off-farm worker’s wage on a household’s labor supplydiffers significantly depending on the household’s type of labor market participation.The wage paid for hired labor has statistically significant and negative effects onoff-farm labor supply. This implies that the hired labor and off-farm labor aresubstitutes, albeit imperfect substitutes in rural China. Our analyses show that theexpansion of livestock production has increasing effects on labor demand butreducing effects on a household’s off-farm labor supply for households that participatein both markets. Land market integration significantly enhances participation inthe labor market but has no significant impact on time allocation. Furthermore, theresults suggest non-separability between off-farm labor supply and householdstructure as well as social network, again confirming that the rural labor market inZhejiang province is still functioning imperfectly.Finally, the panel data also allow us to evaluate the dynamics of households’participation in labor market by applying discrete hazard models. In particular, we investigate the movements between participation and autarky in labor market,between part-time and full-time farming, and between hiring or not hiring labor.We intend to identify the factors that determine the duration for a household’sparticipation in the labor markets. Our results show that the histories of householdsthat participate in labor markets and the likelihood of the households to moveamong the labor markets are significantly related to several household and farmcharacteristics, as well as features of local community. |
| Related Links | https://ageconsearch.umn.edu/record/92321/files/sr_vol42.pdf |
| Ending Page | 124 |
| Page Count | 151 |
| Starting Page | 1 |
| File Format | |
| ISBN | 9783938584255 |
| DOI | 10.22004/ag.econ.92321 |
| Language | English |
| Publisher Date | 2007-01-01 |
| Access Restriction | Open |
| Subject Keyword | Applied Economics Agricultural Economics Agri-economic Open Access Database Research in Applied Economics Research in Agricultural Economics Higher Study On Agricultural Economics Higher Study On Applied Economics Agricultural Research Documents Agrarian Economy & Research Higher Study Agri-economics Research in Economics Agri-economic Open Access Repository Statistics in Agricultural Economics Community/rural/urban Development Consumer/household Economics Labor and Human Capital |
| Content Type | Text |
| Resource Type | Thesis |
| Subject | Economics, Econometrics and Finance |
