IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v22y2011i4p573-584.html
   My bibliography  Save this article

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

Author

Listed:
  • Wang, Xiaobing
  • Huang, Jikun
  • Zhang, Linxiu
  • Rozelle, Scott

Abstract

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.

Suggested Citation

  • Wang, Xiaobing & Huang, Jikun & Zhang, Linxiu & Rozelle, Scott, 2011. "The rise of migration and the fall of self employment in rural China's labor market," China Economic Review, Elsevier, vol. 22(4), pages 573-584.
    • Handle: RePEc:eee:chieco:v:22:y:2011:i:4:p:573-584
    DOI: 10.1016/j.chieco.2011.07.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X11000617
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.chieco.2011.07.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fleisher, Belton M. & Wang, Xiaojun, 2005. "Returns to schooling in China under planning and reform," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 265-277, June.
    2. Lin, Justin Y & Wang, Gewei & Zhao, Yaohui, 2004. "Regional Inequality and Labor Transfers in China," Economic Development and Cultural Change, University of Chicago Press, vol. 52(3), pages 587-603, April.
    3. Zhang, Kevin Honglin & Song, Shunfeng, 2003. "Rural-urban migration and urbanization in China: Evidence from time-series and cross-section analyses," China Economic Review, Elsevier, vol. 14(4), pages 386-400.
    4. Christiaensen, Luc & Pan,Lei & Wang, Sangui, 2010. "Drivers of Poverty Reduction in Lagging Regions: Evidence from Rural Western China," WIDER Working Paper Series 035, World Institute for Development Economic Research (UNU-WIDER).
    5. de Brauw, Alan & Huang, Jikun & Rozelle, Scott & Zhang, Linxiu & Zhang, Yigang, 2002. "The Evolution of China's Rural Labor Markets During the Reforms," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 329-353, June.
    6. Huang, Jikun & Zhi, Huayong & Huang, Zhurong & Rozelle, Scott & Giles, John, 2011. "The Impact of the Global Financial Crisis on Off-farm Employment and Earnings in Rural China," World Development, Elsevier, vol. 39(5), pages 797-807, May.
    7. Luc Christiaensen & Lei Pan & Sangui Wang, 2010. "Drivers of Poverty Reduction in Lagging Regions: Evidence from Rural Western China," WIDER Working Paper Series wp-2010-035, World Institute for Development Economic Research (UNU-WIDER).
    8. Glauben, Thomas & Herzfeld, Thomas & Wang, Xiaobing, 2008. "Labor market participation of Chinese agricultural households: Empirical evidence from Zhejiang province," Food Policy, Elsevier, vol. 33(4), pages 329-340, August.
    9. Cai, Fang & Wang, Meiyan, 2010. "Growth and structural changes in employment in transition China," Journal of Comparative Economics, Elsevier, vol. 38(1), pages 71-81, March.
    10. Zhang, Linxiu & de Brauw, Alan & Rozelle, Scott, 2004. "China's rural labor market development and its gender implications," China Economic Review, Elsevier, vol. 15(2), pages 230-247.
    11. Jian Zhang & Linxiu Zhang & Scott Rozelle & Steve Boucher, 2006. "Self‐Employment With Chinese Characteristics: The Forgotten Engine Of Rural China'S Growth," Contemporary Economic Policy, Western Economic Association International, vol. 24(3), pages 446-458, July.
    12. Giles, John, 2006. "Is life more risky in the open? Household risk-coping and the opening of China's labor markets," Journal of Development Economics, Elsevier, vol. 81(1), pages 25-60, October.
    13. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    14. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
    15. de Brauw, Alan & Rozelle, Scott, 2008. "Migration and household investment in rural China," China Economic Review, Elsevier, vol. 19(2), pages 320-335, June.
    16. Mohapatra, Sandeep & Rozelle, Scott & Goodhue, Rachael, 2007. "The Rise of Self-Employment in Rural China: Development or Distress?," World Development, Elsevier, vol. 35(1), pages 163-181, January.
    17. Fleisher, Belton M. & Hu, Yifan & Li, Haizheng & Kim, Seonghoon, 2011. "Economic transition, higher education and worker productivity in China," Journal of Development Economics, Elsevier, vol. 94(1), pages 86-94, January.
    18. Alan De Brauw & Scott Rozelle, 2008. "Reconciling the Returns to Education in Off‐Farm Wage Employment in Rural China," Review of Development Economics, Wiley Blackwell, vol. 12(1), pages 57-71, February.
    19. Park, Albert & Wang, Dewen, 2010. "Migration and Urban Poverty and Inequality in China," IZA Discussion Papers 4877, Institute of Labor Economics (IZA).
    20. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xiaobing Wang & Linghui Han & Jikun Huang & Linxiu Zhang & Scott Rozelle, 2016. "Gender and Off-farm Employment: Evidence from Rural China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(3), pages 18-36, May.
    2. Yunli Bai & Weidong Wang & Linxiu Zhang, 2018. "How Long Do Return Migrants Stay in Their Home Counties? Trends and Causes," Sustainability, MDPI, vol. 10(11), pages 1-21, November.
    3. Wang, Xiaobing & Yamauchi, Futoshi & Huang, Jikun & Rozelle, Scott, 2020. "What constrains mechanization in Chinese agriculture? Role of farm size and fragmentation," China Economic Review, Elsevier, vol. 62(C).
    4. Démurger, Sylvie & Xu, Hui, 2011. "Return Migrants: The Rise of New Entrepreneurs in Rural China," World Development, Elsevier, vol. 39(10), pages 1847-1861.
    5. Qiang Li & Jikun Huang & Renfu Luo & Chengfang Liu, 2013. "China's Labor Transition and the Future of China's Rural Wages and Employment," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 21(3), pages 4-24, May.
    6. Hu, Feng, 2015. "Return to Education for China’s Return Migrant Entrepreneurs," World Development, Elsevier, vol. 72(C), pages 296-307.
    7. Wang, Xiaobing & Yamauchi, Futoshi & Otsuka, Keijiro & Huang, Jikun, 2016. "Wage Growth, Landholding, and Mechanization in Chinese Agriculture," World Development, Elsevier, vol. 86(C), pages 30-45.
    8. Deininger, Klaus & Jin, Songqing & Xia, Fang & Huang, Jikun, 2014. "Moving Off the Farm: Land Institutions to Facilitate Structural Transformation and Agricultural Productivity Growth in China," World Development, Elsevier, vol. 59(C), pages 505-520.
    9. Wang, Xiaobing, 2007. "Labor market behavior of Chinese rural households during transition," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 42, number 92321.
    10. Jin Yang & Hui Wang & Songqing Jin & Kevin Chen & Jeffrey Riedinger & Chao Peng, 2016. "Migration, local off-farm employment, and agricultural production efficiency: evidence from China," Journal of Productivity Analysis, Springer, vol. 45(3), pages 247-259, June.
    11. Bai, Y. & Wang, W. & Zhang, L., 2018. "How long do returning migrants stay in their home county: Evidence from rural China during 1998 to 2015," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277380, International Association of Agricultural Economists.
    12. Yu Zhu & Zhongmin Wu & Meiyan Wang & Yang Du & Fang Cai, 2011. "Do Migrants Really Save More? Understanding the Impact of Remittances on Savings in Rural China," Journal of Development Studies, Taylor & Francis Journals, vol. 48(5), pages 654-672, June.
    13. Sierdjan Koster & Martin Andersson, 2018. "When is your experience valuable? Occupation-industry transitions and self-employment success," Journal of Evolutionary Economics, Springer, vol. 28(2), pages 265-286, April.
    14. Amelie Constant & Yochanan Shachmurove, 2005. "The comparison of incomes of self-employed and salaried workers among German Nationals and immigrants," PIER Working Paper Archive 05-030, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    15. Sylvie Démurger & Shi Li, 2013. "Migration, Remittances, and Rural Employment Patterns: Evidence from China," Research in Labor Economics, in: Labor Market Issues in China, pages 31-63, Emerald Group Publishing Limited.
    16. Yitao Jiang & Xiaojun Shi & Shunming Zhang & Jingjing Ji, 2011. "The threshold effect of high‐level human capital investment on China's urban‐rural income gap," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 3(3), pages 297-320, September.
    17. Jianmei ZHAO, 2014. "Rural income diversification patterns and their determinants in China," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 60(5), pages 219-231.
    18. Alina Sorgner & Michael Fritsch & Alexander Kritikos, 2017. "Do entrepreneurs really earn less?," Small Business Economics, Springer, vol. 49(2), pages 251-272, August.
    19. Ross Levine & Yona Rubinstein, 2017. "Smart and Illicit: Who Becomes an Entrepreneur and Do They Earn More?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(2), pages 963-1018.
    20. Hu, Feng & Xu, Zhaoyuan & Chen, Yuyu, 2011. "Circular migration, or permanent stay? Evidence from China's rural-urban migration," China Economic Review, Elsevier, vol. 22(1), pages 64-74, March.

    More about this item

    Keywords

    Self-employment; Migration; Wages; Rural China;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:22:y:2011:i:4:p:573-584. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/chieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.