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Agricultural productivity, structural change, and economic growth in post-reform China

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  • Cao, Kang Hua
  • Birchenall, Javier A.

Abstract

We examine the role of agricultural productivity as a determinant of China's post-reform economic growth and sectoral reallocation. Using microeconomic farm-level data, and treating labor as a highly differentiated input, we find that the labor input in agriculture decreased by 5% annually and agricultural TFP grew by 6.5%. Using a calibrated two-sector general equilibrium model, we find that agricultural TFP growth: (i) accounts for the majority of output and employment reallocation toward non-agriculture; (ii) contributes (at least) as much to aggregate and sectoral economic growth as non-agricultural TFP growth; and (iii) influences economic growth primarily by reallocating workers to the non-agricultural sector, where rapid physical and human capital accumulation are currently taking place.

Suggested Citation

  • Cao, Kang Hua & Birchenall, Javier A., 2013. "Agricultural productivity, structural change, and economic growth in post-reform China," Journal of Development Economics, Elsevier, vol. 104(C), pages 165-180.
  • Handle: RePEc:eee:deveco:v:104:y:2013:i:c:p:165-180
    DOI: 10.1016/j.jdeveco.2013.06.001
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    Cited by:

    1. Cai, Wenbiao, 2015. "Structural change accounting with labor market distortions," Journal of Economic Dynamics and Control, Elsevier, vol. 57(C), pages 54-64.
    2. Xi Li & Xuewen Liu & Yong Wang, 2015. "A Model of China's State Capitalism," HKUST IEMS Working Paper Series 2015-12, HKUST Institute for Emerging Market Studies, revised Feb 2015.
    3. Ferreira, Pedro Cavalcanti & Santos, Marcelo Rodrigues & Silva, Leonardo Fonseca, 2013. "Trade, structural transformation and growth in China," Insper Working Papers wpe_327, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
    4. Wan, Guanghua & Luo, Zhi & Zhang, Xun, 2017. "Urbanizing with Equity Consideration," ADBI Working Papers 642, Asian Development Bank Institute.
    5. L Rachel Ngai & Christopher A Pissarides & Jin Wang, 2018. "China’s Mobility Barriers and Employment Allocations," Discussion Papers 1811, Centre for Macroeconomics (CFM).
    6. Era Dabla-Norris & Giang Ho & Annette J Kyobe, 2016. "Structural Reforms and Productivity Growth in Emerging Market and Developing Economies," IMF Working Papers 16/15, International Monetary Fund.
    7. Hehe Liu & Tianyu Yang, 2015. "Explaining the Productivity Growth Gap Between China and India: The Role of Structural Transformation," The Developing Economies, Institute of Developing Economies, vol. 53(2), pages 100-121, June.
    8. repec:spr:chfecr:v:4:y:2016:i:1:d:10.1186_s40589-016-0027-x is not listed on IDEAS
    9. Peng Bin & Marco Vassallo, 2016. "The Growth Path of Agricultural Labor Productivity in China: A Latent Growth Curve Model at the Prefectural Level," Economies, MDPI, Open Access Journal, vol. 4(3), pages 1-20, June.
    10. repec:eee:deveco:v:132:y:2018:i:c:p:18-31 is not listed on IDEAS

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