Does off-farm employment contribute to agriculture-based environmental pollution? New insights from a village-level analysis in Jiangxi Province, China

This study examines the conventional wisdom that off-farm employment contributes to environmental pollution by increasing the use of agro-chemicals. In order to analyse the role of household decision making and village factor markets in more detail, we run simulations with a hybrid farm household/village computable general equilibrium model that is applied to a village in Northeast Jiangxi Province. We find that the negative lost-labour effect of off-farm employment on agricultural incomes is much stronger than the (small) positive income effect. As a result of reduced labour resources and increased leisure consumption, farm households reduce the intensity of rice cultivation as well as the production of (especially) cash crops. The shift in production activities is stronger for migration than for off-farm employment, because migrants cannot combine off-farm work with onfarm work, and because migration reduces the village market price of oxen services. The shift towards less intensive rice production means that off-farm employment (and migration in particular) reduces the levels of chemical inputs and manure used in agricultural production. The decline in fertilizer input is much larger than the decline in manure use, because manure is a nontradable commodity and is applied only once per year. We therefore conclude that migration and, to a lesser extent, local off-farm employment lead to lower incomes from agricultural production, but have benign effects on environmental quality.     

A note on the CERU-MoA grain farm household survey in China

During the period 1994–1995 the Chinese Economy Research Unit (CERU), University of Adelaide, Australia and the Department of Policy, Reform and Law, Ministry of Agriculture (MoA),¹ the People's Republic of China, jointly designed and conducted an annual sample survey of about 1000 farm households in five Chinese provinces: Guangdong, Jilin, Jiangxi, Sichuan and Shandong. The CERU-MoA survey is a part of the ACIAR (Australian Centre for International Agricultural Research) project on China's grain production and marketing during 1994–1996.² Based on this survey a large database has been established which contains cross-household data on population and labour, land, grain production and marketing, food consumption, income and related policy issues.³     

Understanding openness and productivity growth in China: An empirical study of the Chinese provinces

This paper investigates the effects of openness on China's regional productivity growth. We build a model of technology diffusion in which follower economies achieve productivity growth by taking advantage of technology spillovers from the world technology frontier. We hypothesize that China's regional productivity growth is a positive function of regional openness and a negative function of the current level of regional productivity. Empirical analysis in this paper focuses on how openness affects productivity growth in the Chinese provinces. We examine two effects of openness on regional productivity growth in China: the direct growth effect and the convergence effect. By using a variety of panel data regression techniques, we show that the direct growth effect of openness is the main effect while the convergence effect is insignificant. The findings of this paper lend strong support to the claim that the opening-up of China promotes the country's economic growth.     

Japanese foreign direct investment and regional trade

We examine the relationship between Japanese FDI outflows, domestic and foreign fixed investment, and the exchange rate. The results indicate that aggregate FDI outflows have been driven by investment in Japan and the exchange rate, while the geographic distribution of such investment has been influenced by foreign economic conditions. We also find that FDI outflows have a temporary impact on exports but a permanent effect on imports. We find no evidence that behavior with respect to East Asia differs from that with respect to North America or Europe.     

The human cost of China's industrial growth

This paper examines whether industrial growth during economic development is associated with a high workplace fatality rate by using panel data from China. Controlling for provincial and year fixed effects, our estimations show that provincial industrial growth has a positive impact on the workplace fatality rate. We also find that both the growth of industrial labor productivity and the growth of industrial employment have an impact on workplace fatalities. Our instrumental variable fixed effects estimations, which control for simultaneity, show an even greater effect of industrial growth on the fatality rate. Our empirical findings suggest that the Chinese government ought to reconsider its growth-centered policies to save lives.     

Land fragmentation and farm productivity in China in the 1990s

The main objective of this study is to examine the effects of fragmentation on farm productivity in China and to discuss policy implications. Some earlier work has questioned the importance of the economic costs of land fragmentation in developing economies. It has been argued that policymakers should focus instead on reducing the root causes of fragmentation: inefficiencies in land, labour, credit, and food markets. Our results, using a more recent and larger dataset from a household survey in China, find that fragmentation does have an economic cost in China. Production functions are estimated for each of the major grain crops in the sample provinces. We also argue that to reduce the economic costs, land consolidation in China should be undertaken with less government intervention. More attention should be given to the establishment of markets for land (or land use rights) and improvements in rural credit and grain markets.     

Migration constraints and development: Hukou and capital accumulation in China

Rural–urban migration flows are a crucial corollary of economic development. The adverse or beneficial effects of internal migration, for sending as well as receiving areas, and the definition of optimal migration policies, have remained much discussed issues since the seminal works of Harris and Todaro (1970). This debate is especially acute in China where the “household registration system” (hukou) acts as a strong constraint on individual migration. This paper aims to assess the consequences of hukou through a simple model of a developing dual economy with overlapping generations. Contrary to existing studies focused on the contemporaneous allocation of economic resources, it deals with the dynamic consequences of migration flows and migration policies. It shows that, in fairly general circumstances, hukou-related migration constraints can actually hasten development, understood as the transfer of the labor force to the modern sector, driven by capital accumulation. The hukou system could thus be one of the causes of the extremely high Chinese saving rate and of the high pace of Chinese development. Insights from the model are confronted with stylized facts from the Chinese development, and theoretical results are especially consistent with the effects of the 2001 “towns and small cities” reform.     

Decomposition of the increase in earnings inequality in urban China: A distributional approach

This study examines changes in Chinese urban income distribution from 1987 to 1996 and 1996 to 2004 using nationwide household data and investigates the causes of these changes. The Firpo, Fortin, and Lemieux (2007, 2009) method based on unconditional quantile regressions is used to decompose changes in income distribution and income inequality measures, such as variance and a 10:90 ratio. The decomposition results show that wage structure effects, such as a widening gender earnings gap, increases in returns to college education, and increases in earnings differentials between industries, company ownership types, and regions, have been the major contributors to the overall increases in income inequality. It was also found that at different points on the income distribution (e.g., the lower or upper half), the contributing factors that increase income inequality are different.     

Threshold effect in international linkage of stock prices

This paper examines whether the international linkage of the stock price indexes found in previous studies is confirmed for the case where the stock index changes only slightly, utilizing the daily stock price index data from 1975 to 1995 for the US, UK, Germany, and Japan. Using dummy variables in the regressions, it is shown that small changes in the stock price index of any country do not affect the other country's index. In contrast, large changes have a significant effect in most cases. Thus, there is a threshold effect in international linkage of stock prices. It is also shown that negative large changes have a clearer effect than positive ones.     

The impact of agricultural technology adoption on income inequality in rural China: Evidence from southern Yunnan Province

This study analyzes the impact on income inequality of government efforts to increase agricultural incomes in rural China. It collects and analyzes survey data from 473 households in Yunnan, China in 2004. In particular, it investigates the effects of government efforts to promote improved upland rice technologies. Our analysis shows that farmers who adopted these technologies had incomes approximately 15% higher than non-adopters. Despite this relatively large increase, we estimate that the impact on income inequality was relatively slight. This is primarily due to the fact that lower-income farmers adopted the improved rice technology at rates that were roughly equivalent to those of higher-income farmers.     

Socioeconomic inequalities in death from past to present: An introduction

In the early postwar period, improvements in life expectancy in many Western countries made health authorities, health scientists and politicians believe that social differences in mortality converged. The assumption was that inequality, when measured as death rates, was on steady decline, possibly even on the brink of disappearing. The question is then, how far back in time can social differences in mortality be traced? Can they be traced back to the agricultural society or are they a result of industrialization? Whether or not these differences are the result of the industrial revolution became a lively debated issue at the time and has continued to be discussed to date. While many scholars have taken a Malthusian view, that mortality in the past was largely determined by economic factors, others argue that mortality was determined by non-economic factors, leaving little room for a social gradient in mortality. Due to lack of coherent data covering long time periods, our knowledge has been based on bits and pieces of evidence from various locations and time periods. The evidence used is not only fragmentary but furthermore only partly comparable as different definitions of social class and mortality have been used.Here we present results from seven new studies of locations in Western and Southern Europe, the US and Canada for which individual-level longitudinal data exists during the industrialization period. Most of these studies cover also the first part of the twentieth century, a period for which such microdata hitherto has largely been lacking. Taken together, they have a wide geographic coverage and a very long time horizon. Based on these studies, we argue that social differences appeared both long before and long after the industrial breakthrough, in both cases implying that these differences are not directly related to industrialization. We also argue that the association between income and mortality observed today most likely is a recent phenomenon. Overall, a causal link between income and mortality is put into question.     

A political economy analysis of the Korean economic crisis

This paper analyzes the causes of the Korean economic crisis from a political-economic perspective. The author points out that the economic causes which had been mentioned often such as overvalued won exchange rate and moral hazard of financial sector and corporate sector, have political origins. If the Korean economic crisis was caused by political economic factors, structural reform of the economy alone is not sufficient for economic recovery. Therefore, this paper argues, the behaviors of politicians, bureaucrats, and interest groups had been influential for resource allocation in the Korean economy. It concludes that the self-interest seeking activities of various interest groups should be properly controlled.     

The trading behavior and price impact of foreign, institutional, individual investors and government: Evidence from Korean equity market

We examine the dynamic relation between stock returns and four types of investment flows using Korean daily data for the period 1998–2010, focusing on the investment/trading behavior of four types of investors – individual, institutional, government, and foreign – and the effect of cross-border investment flows on the Korean equity market. We find that, first, foreigners and institutional investors tend to drive the Korean equity market, and their trades seem to be information-driven, whereas individual investors do not drive the Korean equity market and their trades do not seem to be information-driven. Second, as a result, both foreigners and institutional investors performed well in the sample period, whereas individual investors performed poorly. Third, the four types of investors differ in their trading behavior. In response to U.S. market returns, foreigners and institutional investors tend to take a momentum strategy whereas individual investors and government tend to take a contrarian strategy.     

Land use change and environmental stress of wheat, rice and corn production in China

Grain self-sufficiency is one of the most important agricultural policy goals in China. With only modest imports, China has succeeded in feeding 22% of the world's population on only 7% of its land. However, a high price has been paid for this enormous achievement. Increase in grain yields, in particular in rice, as the main source of production growth, relied heavily on intensive use of physical inputs and increasing intensity of farming systems. Soil degradation, water scarcity, and severe pollution were among the consequences as well as declining efficiency of fertilizer application. Using county-level panel data from 1980 to 2003 and graphical (GIS-based) analysis, this paper first looks at the spatial change of the major grain production across regions over the past two decades, towards the northern and northeastern provinces. The analysis is complemented by using a random panel data model, which underscores the significant influence of land availability, degree of urbanization, and government policy on grain production. Finally, this analysis addresses environmental stress which includes both soil degradation and water shortage. The latter is already severe in many of the traditional grain producing areas, but will now become a bigger problem in the “new” grain producing areas, as these have traditionally much less water resources. Hence, while the economic rational of the “grain shift” towards the northern and northeastern regions is understandable, its sustainability is not guaranteed.     

Commercialization as exogenous shocks: The effect of the soybean trade and migration in Manchurian villages, 1895–1934

The effects of commercialization and migration in traditional agrarian economies such as China's during the nineteenth and twentieth centuries have been a subject of ferocious debate. Using data from Manchuria on soybean cultivation and exports, we employ difference-in-differences and instrumental variable approaches to demonstrate a significantly positive relationship between growing soybeans for export and the returns to migration. Those who migrated to Manchuria in response to high market prices, and to villages more suitable for cultivating soy prospered most; they owned approximately two-thirds more of the arable land and one-third more of houses than those who failed to do so. Evidence suggests that the positive welfare effect of commercialization-cum-migration was confined not only to the rich, who seek to relieve the “land constraint” at home, but possibly also to the poor.     

Evading the ‘Taint of Usury’: The usury prohibition as a barrier to entry

The development of capital markets in medieval Europe was shaped for centuries by the religious ban on lending money at interest. This paper examines how this prohibition developed as the outcome of strategic behavior by religious, commercial and political elites. A model is developed to analyze this hypothesis and to examine how the usury prohibition developed over time. It suggests that an important reason for the persistence of the ban was that it created a barrier to entry that enabled secular rulers, the Church, and a small number of merchant-bankers to earn monopoly rents.     

Measuring living standards from the lowest: Height of the male Hangryu deceased in colonial Korea

The living standards in Korea during the colonial period (1910–1945) have been debated for a long time. We explored this problem using the height of the Hangryu deceased, a dead person who did not have any acquaintances to claim the body. We found that the height of male Hangryu deceased, ages 25 to 30, increased by 2.2 cm during the colonial period. This result is consistent with recent quantitative studies measuring income levels or demographic information. However, questions such as when this growth in height started and what initiated this pattern need further investigation.     

Once were farmers: Occupation, social mobility, and mortality during industrialization in Saguenay-Lac-Saint-Jean, Quebec 1840–1971

We study men's adult mortality and longevity by socio-occupational status during industrialization in Saguenay-Lac-Saint-Jean, Quebec. Data were extracted from the BALSAC database (Université du Québec à Chicoutimi), which comprehensively traces the demographic history of the region since the beginning of the French Canadian settlement in 1840 up to the early 1970s. Using five occupational classes and controlling for year, age at marriage, urban/rural residence, and literacy, we found no evidence for the emergence of a socioeconomic gradient in mortality. At least until the early 1970s, mortality in the region is the lowest for farmers and appears to be driven by occupational risk rather than fundamental social causes.     

Labor market adjustment under transition in Laos

Laos has engaged in an ambitious program of economic reforms, the New Economic Mechanism. Yet little attention has been devoted to the impact of the reform process on the functioning of the labour market and to the role of the labour market in mobilizing human resources. The purpose of this paper is to examine the impact of reform policy on the labor market and to show how a better adjustment of the labor market can facilitate the success of the New Economic Mechanism. The purpose of the paper is also to show how a better use of the information generated in the labor market can contribute to transforming the reform process into a process of sustained economic growth in Laos.