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A study on urban private capital and the transfer of labor in the modern agriculture sector


  • Xiaochun Li
  • Qin Shen


As urban private capital enters the modern agriculture industry, it divides the agricultural sector into the modern sector and the traditional sector. This article establishes a general equilibrium model to study the economic impact of governmental policies aimed at promoting modern agriculture. The main conclusions of this article are that interest subsidies implemented by the government to promote modern agriculture can reduce the transfer of labor from the rural areas to the cities, but encourage the movement of rural labor to the modern agricultural sector. Conversely, wage rate subsidies for the modern agricultural sector will lead to rises in the urban unemployment rate and a decrease in the quantity of labor in the traditional agricultural sector.

Suggested Citation

  • Xiaochun Li & Qin Shen, 2012. "A study on urban private capital and the transfer of labor in the modern agriculture sector," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 15(2), pages 135-152, June.
  • Handle: RePEc:taf:jpolrf:v:15:y:2012:i:2:p:135-152 DOI: 10.1080/17487870.2012.672833

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    References listed on IDEAS

    1. Martin C. McGuire & Mancur Olson Jr., 1996. "The Economics of Autocracy and Majority Rule: The Invisible Hand and the Use of Force," Journal of Economic Literature, American Economic Association, vol. 34(1), pages 72-96, March.
    2. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    3. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
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