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Migration and Land Rental as Risk Response in Rural China

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  • Ward, Patrick S.
  • Shively, Gerald E.

Abstract

Households in developing countries take various actions to smooth income or consumption as a means of managing or responding to risk. One of the principal means of smoothing income is through the diversification of income sources, including non-farm employment and rural-urban migration. An important consumption smoothing strategy involves the accumulation and depletion of assets. We examine migration and land rental market participation as responses to risk in rural China. Using a longitudinal data set comprised of households in nine provinces in China from 1991 through 2006, we are able to test for the effect of various manifestations of underlying idiosyncratic and covariate income risk on household responses. We find that covariate risks increase land rental market participation, but decrease participation in migration. Idiosyncratic income risks do not affect household rental market participation, perhaps suggesting that intra-village risk sharing is sufficient for households to smooth consumption after experiencing idiosyncratic shocks. Because the death of a household reduces a household's redundant labor, these idiosyncratic labor shocks significantly lower the likelihood that a household will participate in migration.

Suggested Citation

  • Ward, Patrick S. & Shively, Gerald E., 2011. "Migration and Land Rental as Risk Response in Rural China," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103379, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea11:103379
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    File URL: http://purl.umn.edu/103379
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    Cited by:

    1. Eskander, Shaikh & Barbier, Edward, 2016. "Adaptation to Natural Disasters Through the Agricultural Land Rental Market: Evidence from Bangladesh," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235648, Agricultural and Applied Economics Association.
    2. Amare, Mulubrhan & Waibel, Herman, 2014. "Climate Variability, Shocks and Non-farm Employment: Evidence from Rural Households in Northeast Thailand," 54th Annual Conference, Goettingen, Germany, September 17-19, 2014 187571, German Association of Agricultural Economists (GEWISOLA).

    More about this item

    Keywords

    China; risk; consumption smoothing; income smoothing; International Development; Labor and Human Capital; Risk and Uncertainty; O15; R23; Q15;

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • 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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