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How land fragmentation affects off-farm labor supply in China: Evidence from household panel data

  • Jia, Lili
  • Petrick, Martin

This study provides a deeper theoretical understanding of the linkages between land fragmentation and off-farm labor supply and investigates this relationship empirically in a more direct and robust way than in the existing literature. Drawing upon a rural household panel dataset collected in Zhejiang, Hubei and Yunnan provinces from 1995-2002, we estimate the effects in two steps. First, we estimate the effect of land fragmentation on labor productivity. Second, we estimate the effect of land fragmentation on off-farm labor supply. The production function results show that land fragmentation indeed leads to lower agricultural labor productivity, implying land consolidation will make on-farm work more attractive and thus decrease off-farm labor supply. However, the effect of land consolidation on off-farm labor supply cannot be observed in the presence of imperfect labor market and this conclusion is supported by a direct estimation of the effect of land fragmentation on off-farm labor supply.

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Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 126263.

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Date of creation: 2012
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Handle: RePEc:ags:iaae12:126263
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