Machinery investment decision and off-farm employment in rural China

This paper investigates the endogenous linkages between farmers' machinery investment decision and off-farm employment in China. Both the theoretical model and the empirical results based on a survey of 453 households in Anhui Province indicate that agricultural labor input and small-sized machinery investment are gross complements rather than substitutes when machinery services are available in the market. Consequently, farmers with small-sized machinery are more likely to reduce their off-farm employment time. On the other hand, an increase in off-farm employment is more likely to reduce the possibility of possessing small-sized machineries mainly due to substitution effects of market machinery services.     

Returns to military service in off-farm wage employment: Evidence from rural China

This paper studies the returns to military service in off-farm wage employment and the implications of military service on the rural-urban transition in rural China. We exploit government-induced variations in aggregate enrollment rates as our instrumental variable. Using data from the China Family Panel Studies, we find a substantial positive effect of military service on off-farm wage employment and earnings for men of rural origin, which is comparable in magnitude to the estimated returns to a college education in China. We also provide evidence that the earnings premium is likely to be explained by improved access to urban formal employment, political and human capital accumulation. However, in spite of the off-farm employment gain for all cohorts, we find that the positive earnings premium of military service is mainly concentrated among the pre-1970 cohort.     

The role of off-farm employment in the rural energy consumption transition — A village-level analysis in Jiangxi Province, China

Energy consumption in rural areas in China is characterized by high consumption of fuelwood, straw and other biomass. Off-farm employment can play an important role in the transition towards more sustainable sources of energy by increasing rural household incomes and reducing the amount of labor available for biomass collection. The purpose of this paper is to examine the impact of off-farm employment on rural household energy consumption choices, and to disentangle the various causal relationships that play a role in this respect. To this end, a hybrid farm household/village computable general equilibrium (CGE) model is used that has been calibrated for a remote village in Northeast Jiangxi Province where fuelwood is the main source of energy. The model takes into account nonseparability of farm household production and consumption decisions as well as linkages within the village between households involved in off-farm employment and households with no members working off-farm. Contrary to previous research for a richer region in rural China, we find that fuelwood is not an inferior good. The positive impact of more food consumption on fuelwood collection more than compensates the higher leisure demand associated with higher incomes. Shifts in production activities and in prices on village factor markets caused by increased labour scarcity (the lost-labour effect of off-farm employment), on the other hand, cause a reduction in fuelwood collection and consumption. This lost-labour effect is much stronger for migration than for local off-farm employment, because the latter can more easily be combined with on-farm work and fuelwood collection. For local off-farm employment the income effect dominates the lost-labour effect, resulting in a positive overall impact of higher off-farm participation on fuelwood consumption. For migration, on the other hand, the income effect and the lost-labour effect are almost equal in size. Hence, the amount of fuelwood collected and consumed does not change much when households participate in migration. The final conclusion is therefore that increased off-farm employment opportunities do not promote the transition of rural energy use in the poorer regions of rural China.     

Political conflict and rural industrialization in China

Rural industries have advanced especially rapidly since the Cultural Revolution. Although the political shift of late 1976 created doubt about their future, little significant difference exists between the earlier and present basic approaches. Rural industrialization has been stressed as a way to develop the economies of the larger rural collectives (brigades and communes). This process is quite advanced in some suburban and relatively developed rural areas, where commune and brigade industries employ substantial proportions of the local labour force, and contribute as much as half or more of total output, thus paving the way for the transition to a higher level of collective organization and ownership in the countryside.     

The employment environment for youth in rural South Africa: A mixed-methods study

South Africa has high youth unemployment. This article examines the predictors of youth employment in rural Agincourt, Mpumalanga Province. A survey of 187 out-of-school 18 to 24 year olds found that only 12% of women and 38% of men were currently employed. Men with skills/training were significantly more likely to report employment, mostly physical labour (adjusted odds ratio: 4.5; confidence interval: 1.3, 15.3). In-depth interviews with 14 of the youth revealed that women are perceived more suitable for formal employment, which is scarce, informing why women were more likely to pursue further education and yet less likely to be employed. Ten key informants from local organisations highlighted numerous local youth employment resources while, in contrast, all youth in the sample said no resources were available, highlighting a need for the organisations to extend their services into rural areas. Because these services are focused on entrepreneurship, programmes to increase financial literacy and formal employment opportunities are also needed.     

Land rental market, off-farm employment and agricultural production in Southeast China: A plot-level case study

This paper performs a plot-level analysis of the impact of land rental market participation and off-farm employment on land investment, input use, and rice yields for 215 plots cultivated by 52 households in three villages in Northeast Jiangxi Province. Our findings show that households that rent extra land are relatively more productive, but contradict results of earlier studies which found that tenure status of plots affects the level of land investments. We further find that off-farm employment does not significantly affect rice yields. This result contradicts those of earlier studies which found that the negative lost-labor effect of off-farm employment dominates the positive income effect. Another novel finding is that people working locally off-farm tend to switch from green manure planting towards the use of organic manure on their rice plots. We conclude that policies that will further stimulate the development of land rental markets, which is still in its infancy, can contribute significantly to higher rice production in Southeast China. Another implication of our results is that worries about the negative impact that the continuously growing off-farm employment may have on China's goal to remain self-sufficient in grain production are less relevant at the moment for the region examined in our study.     

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.     

Off-farm employment and time allocation in on-farm work in rural China from gender perspective

This paper sheds light on how the growing number of off-farm employees affects the labor allocation of female and male left-behind farmers in the Chinese agricultural sector. We find no direct effect of off-farm employment on left behind workers' total working time in farming, nor do we observe a gender difference in this respect. However, we do find that increasing off-farm work is associated with fewer days worked on staple crops, and in the harvesting and sales stages of the production process. Hiring labor and buying agricultural services also impact left behind workers' time allocation. Moreover, we find that in China, contrary to several other developing countries, there is no trend towards a feminization of agriculture, but rather a tendency in the reverse direction.     

Grain subsidy,off-farm labor supply and farmland leasing: Evidence from China

This study investigates the impact of direct grain subsidy and off-farm labor supply on farmland leasing options in China, using multinomial logit and farm household-level data. Results show that the grain subsidy has a significant and positive effect on both leasing out and leasing in farmland in rural China. Rural households with an increased share of full-time off-farm workers are more likely to lease out farmland and less likely to lease it in. Older operators and households with less educational attainment are less likely to lease in farmland. Large farms are likely to both lease out and lease in farmland. Finally, the Land Shareholding Cooperative System (LSCS) plays an important role in China's farmland leasing market.     

The employment and wage effects of export VAT rebates: evidence from China

Review of World Economics - This paper studies the employment and wage effects of VAT rebates to exporters with comprehensive firm-product-level data of China. It is found that the adjustments in...     

深圳市农村产业化发展研究——对龙岗区产业发展状况的调研报告

1993年1月，原深圳市宝安县一分为二，东部宝安区辖9镇，西部龙岗区辖10镇，既拉开了区镇经济全面发展的序幕，亦加速了深圳市农村城市化与产业化的进程。……     

Guaranteeing employment to the rural poor: Social functions and class interests in the employment guarantee scheme in Western India

Numerous observers rightly term the landless rural population the ‘most intractable development problem’ in poor societies. Given the extraordinary political and administrative obstacles to redistrubution of rural assets in India (the widely-recognized failture land reforms), attention and finances have recently been focused on public rural employment programmes to alleviate rural distribution. Within India, the State of Maharashtra, with a size and population of a large European nation, has instituted a striking departure from traditional rural works programmes: a guarantee of employment to rural adults on demand. The Employment Guarantee Scheme in one state has since become a significant policy model, and the experience in that state provides something like a laboratory for its analysis. Based on analysis of previous studies and original field work in rural Maharashtra, the article argues that the scheme is something of a rare bird: a programme which seems to be in the objective and subjective interests of the rural poor, as well as consistent with the interests of the rural landed elite, despite their early political objections. The fiscal structure of the scheme is a direct contradiction of Lipton's (1977) model of ‘urban bias’ in Third World development strategies; the Employment Guarantee Scheme is rather more a manifestation of ‘kulak power’. Though promulgated as an alternative to policies entailing redistribution of rural assets, and clearly superior to doing nothing about rural distribution, the scheme is inferior to genuine redistribution in terms of altering the rural political economy. The functions, if not the motivations, of the scheme are profoundly conservative in a structural sense, politically and economically; the philosophical underpinnings, and perhaps, potentially, the consequences for mobilization of the rural poor, are quite the opposite.     

Institutional dynamics and access to non-farm employment in rural China, 1950–1996

This article examines non-farm employment in the context of Chinese rural institutional change, based on evidence from discrete-time logistic models for event history analysis using the Life History and Social Change survey. We find the transition to non-farm sector rose rapidly during the Great Leap Forward and market reform, while the Cultural Revolution saw it reach the lowest ebb. While male advantage prevailed exclusively during the Cultural Revolution and early marketization, education possessed a stable positive effect in all historical periods. Although the returns to different kinds of political capital vary along with institutional dynamics, intergenerational reproduction was greatly reduced after the Cultural Revolution.     

Union effects on performance and employment relations: Evidence from China

This paper empirically studies union effects on the performance of, and employment relations in, China's private enterprises. The study finds a positive and statistically significant union effect on labor productivity, but not on profitability. It further finds that unions lead to better employee benefits and increased contract signing in employment. These findings suggest that, in the era of transition from a centrally planned to a market economy, unions in China's private enterprises do promote workers' interests as unions do in other economies. And they do that without abandoning their traditional role of harmonizing employment relations, as required by the Party.     

Off-farm employment and grain production change: New evidence from China

How does off-farm employment affect grain production? Previous research findings are inconsistent. This paper provides a general theoretical framework to explain the effect of off-farm employment on grain production and consider that the effect is non-liner. The empirical results show that off-farm employment decreases grain production and insignificantly changes grain crop structure. Importantly, we find an inverted-U correlation between off-farm employment and grain production, meaning that off-farm employment will increase grain production when the off-farm labor supply is relatively low and will decrease grain production when the off-farm labor supply is relatively high. Further, we investigate the heterogeneity of the causal effect in the destinations of off-farm employment, household's land scale, land features, household location, and household aging.     

The rise of migration and the fall of self employment in rural China's labor market

When examining questions regarding the Lewis model, one of the most salient set of facts involves the shift of labor between agricultural and the off farm sectors. The goal of this paper is to answer several questions about the nature of this movement: How has the expansion of the economy after 2000 affected off farm labor market participation? Has off farm labor continued to rise? What is this rise being driven by—migrant wage earners or self employment opportunities? What is, in part, driving these trends? Using a national representative set of data that consists of two waves of surveys done in 2000 and 2008 in six provinces, the paper finds that off farm labor market participation has continued to rise steadily in the early 2000s. However, there has been a structural break in the trends of occupational choice before and after 2000. Unlike before 2000, after 2000 migration's growth accelerated; during this same period the self employed subsector stagnated. The number of wage earning migrants in 2008 was greater than the number of those in the self employed subsector. The data also show that the rise in wage-earning migration is mainly being driven by the younger cohorts. Our analysis also shows that the rise of migration is happening in conjunction with a rising unskilled wage.     

The heterogeneous effects of employment-based pension policies on employment: Evidence from urban China

Pension contributions are usually non-trivial labor costs for firms in formal sectors. This paper aims to examine the heterogeneous effects of employer pension contribution rates on employment by exploiting temporal and spatial variations in the statutory pension contribution rates of the Basic Old-Age Insurance (BOAI) in urban China. We refer to the China’s Urban Household Survey (UHS) (2002–2009), in order to demonstrate that increasing the employer statutory pension contribution rates leads to a decrease in employment in state-owned enterprises (SOEs), and an increase in employment in private enterprises. Overall, the pension contribution rates for employers has no obvious effects on total employment. Our results highlight that private sector employment can be an important mechanism to absorb displaced workers produced by labor market policies.     

The impact of an accelerated depreciation tax policy on employment: Evidence from China

We examine the impact of an accelerated depreciation tax policy (ADP) on employment. As a tax incentive policy, we expect an ADP to impact firm behavior significantly, but its effect on employment remains uninvestigated. Leveraging the two-stage implementation of an ADP in selected industries in China in 2014 and 2015 and using a difference-in-differences research design, we find that: 1) the ADP significantly increases employment, which is consistent with the output effect hypothesis; and 2) the ADP increases firms’ labor demand, mainly by stimulating investment in fixed assets and easing their financial constraints. Additional analysis suggests that the impact of ADP on employment is more salient for small firms, non-state-owned firms, and high growth firms, and skilled labor employment, indicating that the ADP is more effective for firms with high financial constraints and hiring skilled labor to accompany the increase in capital investment.     

Tax enforcement and corporate employment: Evidence from a quasi-natural experiment in China

This study investigates how tax enforcement affects corporate employment in China. We utilize the merger of the State Tax Bureau and Local Tax Bureaus as a quasi-natural experiment and adopt a difference-in-differences framework to identify causality. The results show that tougher tax enforcement has a significant and negative effect on corporate employment and that this effect is more pronounced for firms with higher labor intensity, greater financial constraints, more severe labor market frictions, a lower initial tax rate, lower tax transfer ability, and greater credit market imperfections. Further, the mechanism tests demonstrate that tougher tax enforcement leads to increases in the effective income tax rate, cash holdings, and the cash flow sensitivity of real investment but decreases in accounts receivable and dividend payments. These results are consistent with the liquidity constraints channel. In addition, we exclude several alternative explanations and conduct a series of robustness checks. Overall, our findings indicate that corporate tax enforcement has large effects on the local labor demand, which provides some useful insights for local governments to stabilize employment during the COVID-19 pandemic.