Surplus agricultural labour and China's Lewis turning point

Official data are criticized for over-reported agricultural labour statistics. We derive an alternative series of labour participated in agriculture with the information of production cost and revenue. Using parametric stochastic frontier approach, labour requirement functions are estimated for 30 farm and animal husbandry products in rural China. The estimated required amount of labour is compared with our newly-derived observed agricultural labour to obtain the surplus labour. This surplus ranges from 18% to 12% of agricultural labour between 2001 and 2013. Our results reveal that China was relatively successful in reducing redundant labour in rice production. Equally important, the trends of our estimated surplus place China in the second stage of transition under the Lewis-Fei-Ranis framework, moving in the direction of full commercialization or the so-called Lewis turning point.