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Wage Growth, Landholding, and Mechanization in Chinese Agriculture

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  • Wang, Xiaobing
  • Yamauchi, Futoshi
  • Otsuka, Keijiro
  • Huang, Jikun

Abstract

This paper aims to examine the dynamics of land transactions, machine investments, and the demand for machine services using farm panel data from China. Recently, China’s agriculture has experienced a large expansion of machine rentals and machine services provided by specialized agents, which has contributed to mechanization of agricultural production. On the other hand, the empirical results show that an increase in non-agricultural wage rates leads to expansion of self-cultivated land size. A rise in the proportion of non-agricultural income or the migration rate also increases the size of self-cultivated land. Interestingly, however, relatively educated farm households decrease the size of self-cultivated land, which suggests that relatively less educated farmers tend to specialize in farming. The demand for machine services has also increased if agricultural wage and migration rate increased over time, especially among relatively large farms. The results on crop income also support complementarities between rented-in land and machine services (demanded), which implies that scale economies are arising in Chinese agriculture with mechanization and active land rental markets.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:wdevel:v:86:y:2016:i:c:p:30-45
    DOI: 10.1016/j.worlddev.2016.05.002
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    8. Yamauchi, Futoshi, 2014. "Wage growth, landholding, and mechanization in agriculture : evidence from Indonesia," Policy Research Working Paper Series 6789, The World Bank.
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    12. Ma, M., 2018. "Earthbound Labor and Transitory Exit from Farming in China," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277433, International Association of Agricultural Economists.
    13. Rada, Nicholas E. & Fuglie, Keith O., 2019. "New perspectives on farm size and productivity," Food Policy, Elsevier, vol. 84(C), pages 147-152.
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    15. 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).
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    More about this item

    Keywords

    wage growth; farm size; land rental; machine services; China;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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