IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v48y2018icp244-257.html
   My bibliography  Save this article

Surplus agricultural labour and China's Lewis turning point

Author

Listed:
  • Kwan, Fung
  • Wu, Yanrui
  • Zhuo, Shuaihe

Abstract

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.

Suggested Citation

  • Kwan, Fung & Wu, Yanrui & Zhuo, Shuaihe, 2018. "Surplus agricultural labour and China's Lewis turning point," China Economic Review, Elsevier, vol. 48(C), pages 244-257.
    • Handle: RePEc:eee:chieco:v:48:y:2018:i:c:p:244-257
    DOI: 10.1016/j.chieco.2017.01.009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X17300184
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.chieco.2017.01.009?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. Zhang, Xiaobo & Yang, Jin & Wang, Shenglin, 2011. "China has reached the Lewis turning point," China Economic Review, Elsevier, vol. 22(4), pages 542-554.
    2. Fung Kwan, 2009. "Agricultural labour and the incidence of surplus labour: experience from China during reform," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 7(3), pages 341-361.
    3. Minami, Ryoshin, 1968. "The Turning Point in the Japanese Economy," Economic Review, Hitotsubashi University, vol. 19(3), pages 220-229, July.
    4. Nazrul Islam & Kazuhiko Yokota, 2008. "Lewis Growth Model and China's Industrialization," Asian Economic Journal, East Asian Economic Association, vol. 22(4), pages 359-396, December.
    5. Knight, John & Deng, Quheng & Li, Shi, 2011. "The puzzle of migrant labour shortage and rural labour surplus in China," China Economic Review, Elsevier, vol. 22(4), pages 585-600.
    6. Ryoshin Minami, 1968. "The Turning Point in the Japanese Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 82(3), pages 380-402.
    7. Golley, Jane & Meng, Xin, 2011. "Has China run out of surplus labour?," China Economic Review, Elsevier, vol. 22(4), pages 555-572.
    8. Kumbhakar, Subal C & Hjalmarsson, Lennart, 1995. "Labour-Use Efficiency in Swedish Social Insurance Offices," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(1), pages 33-47, Jan.-Marc.
    9. Diewert, W E, 1974. "Functional Forms for Revenue and Factor Requirements Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 15(1), pages 119-130, February.
    10. Fung Kwan & Yanrui Wu & Shuaihe Zhuo, 2013. "Re‐examination of the surplus agricultural labour in China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 5(2), pages 197-212, May.
    11. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
    12. Marco G. Ercolani & Zheng Wei, 2011. "An Empirical Analysis of China's Dualistic Economic Development: 1965–2009," Asian Economic Papers, MIT Press, vol. 10(3), pages 1-29, Fall.
    13. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    14. 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.
    15. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    16. Bhattacharyya, Arunava & Parker, Elliott, 1999. "Labor productivity and migration in Chinese agriculture A stochastic frontier approach," China Economic Review, Elsevier, vol. 10(1), pages 59-74.
    17. CAI, Fang & DU, Yang, 2011. "Wage increases, wage convergence, and the Lewis turning point in China," China Economic Review, Elsevier, vol. 22(4), pages 601-610.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pengfei Ge & Tan Liu & Xiaoxu Wu & Xiulu Huang, 2023. "Heterogenous Urbanization and Agricultural Green Development Efficiency: Evidence from China," Sustainability, MDPI, vol. 15(7), pages 1-22, March.
    2. Yi Zhang & Tao Shi & Ai-Jun Wang & Qi Huang, 2022. "Air Pollution, Health Shocks and Labor Mobility," IJERPH, MDPI, vol. 19(3), pages 1-21, January.
    3. Huaicheng Li & Qing He & Chenming Liu & Wei Dai & Rilong Fei, 2022. "How to Maintain Sustainable Development of China’s Agriculture under the Restriction of Production Resources? Research with Respect to the Effect on Output of the Substitution of Input Factors," Energies, MDPI, vol. 15(10), pages 1-19, May.
    4. Subir Bairagi & Muntaseer Kamal, 2019. "Is Bangladesh’s Economy Approaching the Lewis Turning Point?," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 20(1), pages 19-45, March.
    5. Johnston, Lauren A., 2020. "China’s Economic Demography Transition Strategy: A Population Weighted Approach to the Economy and Policy," GLO Discussion Paper Series 593, Global Labor Organization (GLO).
    6. Dazhuan Ge & Hualou Long & Li Ma & Yingnan Zhang & Shuangshuang Tu, 2017. "Analysis Framework of China’s Grain Production System: A Spatial Resilience Perspective," Sustainability, MDPI, vol. 9(12), pages 1-21, December.
    7. Baležentis, Tomas & Li, Tianxiang & Chen, Xueli, 2021. "Has agricultural labor restructuring improved agricultural labor productivity in China? A decomposition approach," Socio-Economic Planning Sciences, Elsevier, vol. 76(C).
    8. Ye Ye & Rosmini Omar & Binyao Ning & Hiram Ting, 2020. "Intergenerational Transmission of Occupation: A Qualitative Inquiry into Frontline Factory Workers in China," Sustainability, MDPI, vol. 12(20), pages 1-17, October.
    9. Kwan, Fung & Zhang, Yang & Zhuo, Shuaihe, 2018. "Labour reallocation, productivity growth and dualism: The case of China," International Review of Economics & Finance, Elsevier, vol. 57(C), pages 198-210.
    10. Martin Ravallion & Shaohua Chen, 2022. "Is that really a Kuznets curve? Turning points for income inequality in China," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(4), pages 749-776, December.

    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. Andrea Fracasso, 2015. "Economic Rebalancing and Growth: the Japanese experience and China’s prospects," DEM Discussion Papers 2015/07, Department of Economics and Management.
    2. Prema-chandra Athukorala & Zheng Wei, 2015. "Economic Transition and Labour Market Dynamics in China: An Interpretative Survey of the ‘Turning Point’ Debate," Departmental Working Papers 2015-06, The Australian National University, Arndt-Corden Department of Economics.
    3. Shang-Jin Wei & Zhuan Xie & Xiaobo Zhang, 2017. "From "Made in China" to "Innovated in China": Necessity, Prospect, and Challenges," Journal of Economic Perspectives, American Economic Association, vol. 31(1), pages 49-70, Winter.
    4. Xiaobing Wang & Nick Weaver, 2013. "Surplus labour and Lewis turning points in China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 11(1), pages 1-12, February.
    5. Ge, Suqin & Yang, Dennis Tao, 2011. "Labor market developments in China: A neoclassical view," China Economic Review, Elsevier, vol. 22(4), pages 611-625.
    6. Prema†chandra Athukorala & Zheng Wei, 2018. "Economic Transition And Labour Market Dynamics In China: An Interpretative Survey Of The €˜Turning Point’ Debate," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 420-439, April.
    7. Yinhua Mai & Xiujian Peng & Peter Dixon & Maureen Rimmer, 2014. "The economic effects of facilitating the flow of rural workers to urban employment in China," Papers in Regional Science, Wiley Blackwell, vol. 93(3), pages 619-642, August.
    8. Kwan, Fung & Zhang, Yang & Zhuo, Shuaihe, 2018. "Labour reallocation, productivity growth and dualism: The case of China," International Review of Economics & Finance, Elsevier, vol. 57(C), pages 198-210.
    9. Bonatti, Luigi & Fracasso, Andrea, 2013. "Regime switches in the Sino-American co-dependency: Growth and structural change in China," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 1-32.
    10. Qu, Zhaopeng & Zhao, Zhong, 2017. "Glass ceiling effect in urban China: Wage inequality of rural-urban migrants during 2002–2007," China Economic Review, Elsevier, vol. 42(C), pages 118-144.
    11. Xin Deng, 2018. "Embedding ‘familiness’ in HRM practices to retain a new generation of migrant workers in China," Asia Pacific Business Review, Taylor & Francis Journals, vol. 24(4), pages 561-577, August.
    12. Hao, Yu & Zhang, Zong-Yong & Yang, Chuxiao & Wu, Haitao, 2021. "Does structural labor change affect CO2 emissions? Theoretical and empirical evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 171(C).
    13. Andersson, Fredrik N.G. & Edgerton, David L. & Opper, Sonja, 2013. "A Matter of Time: Revisiting Growth Convergence in China," World Development, Elsevier, vol. 45(C), pages 239-251.
    14. Iris Claus & Les Oxley & Yang Du & Cuifen Yang, 2014. "Demographic Transition And Labour Market Changes: Implications For Economic Development In China," Journal of Economic Surveys, Wiley Blackwell, vol. 28(4), pages 617-635, September.
    15. Boogen, Nina, 2017. "Estimating the potential for electricity savings in households," Energy Economics, Elsevier, vol. 63(C), pages 288-300.
    16. Hao Qi, 2019. "Semi-Proletarianization in a Dual Economy: The Case of China," Review of Radical Political Economics, Union for Radical Political Economics, vol. 51(4), pages 553-561, December.
    17. Bhattacharyya, Arunava & Parker, Elliott, 1999. "Labor productivity and migration in Chinese agriculture A stochastic frontier approach," China Economic Review, Elsevier, vol. 10(1), pages 59-74.
    18. Golley, Jane & Meng, Xin, 2011. "Has China run out of surplus labour?," China Economic Review, Elsevier, vol. 22(4), pages 555-572.
    19. Du, Julan & Fang, Hongsheng & Jin, Xiangrong, 2014. "The “growth-first strategy” and the imbalance between consumption and investment in China," China Economic Review, Elsevier, vol. 31(C), pages 441-458.
    20. Kumbhakar, Subal C. & Hjalmarsson, Lennart, 1998. "Relative performance of public and private ownership under yardstick competition: electricity retail distribution," European Economic Review, Elsevier, vol. 42(1), pages 97-122, January.

    More about this item

    Keywords

    Stochastic frontier analysis; Technical efficiency; Chinese agricultural labour; Lewis turning point;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    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:48:y:2018:i:c:p:244-257. 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.