IDEAS home Printed from https://ideas.repec.org/p/ags/iaae15/212618.html
   My bibliography  Save this paper

Wage Growth, Landholding and Mechanization in Chinese Agriculture

Author

Listed:
  • 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. 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, relatively educated farm households, however, 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, 2015. "Wage Growth, Landholding and Mechanization in Chinese Agriculture," 2015 Conference, August 9-14, 2015, Milan, Italy 212618, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae15:212618
    DOI: 10.22004/ag.econ.212618
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/212618/files/Wang-Wage%20Growth_%20Landholding%20and%20Mechanization%20in%20Chinese%20Agriculture-309.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.212618?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dwayne Benjamin & Loren Brandt, 2002. "Property rights, labour markets, and efficiency in a transition economy: the case of rural China," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 689-716, November.
    2. Taylor, J Edward & Rozelle, Scott & de Brauw, Alan, 2003. "Migration and Incomes in Source Communities: A New Economics of Migration Perspective from China," Economic Development and Cultural Change, University of Chicago Press, vol. 52(1), pages 75-101, October.
    3. Chen, Zhuo & Huffman, Wallace E. & Rozelle, Scott, 2009. "Farm technology and technical efficiency: Evidence from four regions in China," China Economic Review, Elsevier, vol. 20(2), pages 153-161, June.
    4. Bowlus, Audra J. & Sicular, Terry, 2003. "Moving toward markets? Labor allocation in rural China," Journal of Development Economics, Elsevier, vol. 71(2), pages 561-583, August.
    5. Keijiro Otsuka & Yanyan Liu & Futoshi Yamauchi, 2013. "Factor Endowments, Wage Growth, and Changing Food Self-Sufficiency: Evidence from Country-Level Panel Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(5), pages 1252-1258.
    6. Cai, Fang & Wang, Meiyan, 2010. "Growth and structural changes in employment in transition China," Journal of Comparative Economics, Elsevier, vol. 38(1), pages 71-81, March.
    7. Giles, John, 2006. "Is life more risky in the open? Household risk-coping and the opening of China's labor markets," Journal of Development Economics, Elsevier, vol. 81(1), pages 25-60, October.
    8. Brandt,Loren & Rawski,Thomas G. (ed.), 2008. "China's Great Economic Transformation," Cambridge Books, Cambridge University Press, number 9780521885577.
    9. Yanjie Zhang & Xiaobing Wang & Thomas Glauben & Bernhard Brümmer, 2011. "The impact of land reallocation on technical efficiency: evidence from China," Agricultural Economics, International Association of Agricultural Economists, vol. 42(4), pages 495-507, July.
    10. de Brauw, Alan & Rozelle, Scott, 2008. "Migration and household investment in rural China," China Economic Review, Elsevier, vol. 19(2), pages 320-335, June.
    11. Brandt,Loren & Rawski,Thomas G. (ed.), 2008. "China's Great Economic Transformation," Cambridge Books, Cambridge University Press, number 9780521712903.
    12. Jin Yang & Zuhui Huang & Xiaobo Zhang & Thomas Reardon, 2013. "The Rapid Rise of Cross-Regional Agricultural Mechanization Services in China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(5), pages 1245-1251.
    13. Keijiro Otsuka, 2013. "Food insecurity, income inequality, and the changing comparative advantage in world agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 44(s1), pages 7-18, November.
    14. Alan de Brauw & Jikun Huang & Linxiu Zhang & Scott Rozelle, 2013. "The Feminisation of Agriculture with Chinese Characteristics," Journal of Development Studies, Taylor & Francis Journals, vol. 49(5), pages 689-704, May.
    15. Ji, Yueqing & Yu, Xiaohua & Zhong, Funing, 2012. "Machinery investment decision and off-farm employment in rural China," China Economic Review, Elsevier, vol. 23(1), pages 71-80.
    16. Sarah Cook, 1999. "Surplus labour and productivity in Chinese agriculture: Evidence from household survey data," Journal of Development Studies, Taylor & Francis Journals, vol. 35(3), pages 16-44.
    17. Hongbin Li & Lei Li & Binzhen Wu & Yanyan Xiong, 2012. "The End of Cheap Chinese Labor," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 57-74, Fall.
    18. Zhang, Kevin Honglin & Song, Shunfeng, 2003. "Rural-urban migration and urbanization in China: Evidence from time-series and cross-section analyses," China Economic Review, Elsevier, vol. 14(4), pages 386-400.
    19. Liangliang Gao & Jikun Huang & Scott Rozelle, 2012. "Rental markets for cultivated land and agricultural investments in China," Agricultural Economics, International Association of Agricultural Economists, vol. 43(4), pages 391-403, July.
    20. Fumio Hayashi & Edward C. Prescott, 2008. "The Depressing Effect of Agricultural Institutions on the Prewar Japanese Economy," Journal of Political Economy, University of Chicago Press, vol. 116(4), pages 573-632, August.
    21. Loren Brandt & Scott Rozelle & Matthew A. Turner, 2004. "Local Government Behavior and Property Right Formation in Rural China," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(4), pages 627-662, December.
    22. Lin, Justin Yifu, 1991. "Public Research Resource Allocation in Chinese Agriculture: A Test of Induced Technological Innovation Hypotheses," Economic Development and Cultural Change, University of Chicago Press, vol. 40(1), pages 55-73, October.
    23. Ayal Kimhi, 2000. "Is Part-Time Farming Really a Step in the Way Out of Agricultural?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 38-48.
    24. Yamauchi, Futoshi, 2016. "Rising real wages, mechanization and growing advantage of large farms: Evidence from Indonesia," Food Policy, Elsevier, vol. 58(C), pages 62-69.
    25. Weiss, Christoph R, 1997. "Do They Come Back Again? The Symmetry and Reversibility of Off-Farm Employment," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 24(1), pages 65-84.
    26. Mark R. Rosenzweig & Andrew D. Foster, 2010. "Is There Surplus Labor in Rural India?," Working Papers 991, Economic Growth Center, Yale University.
    27. Liu, Yunhua & Wang, Xiaobing, 2005. "Technological progress and Chinese agricultural growth in the 1990s," China Economic Review, Elsevier, vol. 16(4), pages 419-440.
    28. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
    29. Wang, Xiaobing & Huang, Jikun & Zhang, Linxiu & Rozelle, Scott, 2011. "The rise of migration and the fall of self employment in rural China's labor market," China Economic Review, Elsevier, vol. 22(4), pages 573-584.
    30. CAI, Fang & DU, Yang, 2011. "Wage increases, wage convergence, and the Lewis turning point in China," China Economic Review, Elsevier, vol. 22(4), pages 601-610.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Deininger, Klaus & Jin, Songqing & Xia, Fang & Huang, Jikun, 2014. "Moving Off the Farm: Land Institutions to Facilitate Structural Transformation and Agricultural Productivity Growth in China," World Development, Elsevier, vol. 59(C), pages 505-520.
    2. 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).
    3. Wang, Xiaobing, 2007. "Labor market behavior of Chinese rural households during transition," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 42, number 92321.
    4. Jia, Lili, 2012. "Land fragmentation and off-farm labor supply in China," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 66, number 66.
    5. Jia, Lili & Petrick, Martin, 2014. "How does land fragmentation affect off-farm labor supply: panel data evidence from China," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 369-380.
    6. Stephan Brosig & Thomas Glauben & Thomas Herzfeld & Scott Rozelle & Xiaobing Wang, 2007. "The dynamics of Chinese rural households' participation in labor markets," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2‐3), pages 167-178, September.
    7. Jia, Lili & Petrick, Martin, 2011. "How land fragmentation affects off-farm labor supply in China: Evidence from household panel data," 51st Annual Conference, Halle, Germany, September 28-30, 2011 114522, German Association of Agricultural Economists (GEWISOLA).
    8. Xiaobing Wang & Futoshi Yamauchi & Jikun Huang, 2016. "Rising wages, mechanization, and the substitution between capital and labor: evidence from small scale farm system in China," Agricultural Economics, International Association of Agricultural Economists, vol. 47(3), pages 309-317, May.
    9. Yamauchi, Futoshi, 2014. "Wage growth, landholding, and mechanization in agriculture : evidence from Indonesia," Policy Research Working Paper Series 6789, The World Bank.
    10. BROSIG, Stephan & GLAUBEN, Thomas & Herzfeld, Thomas & WANG, Xiaobing, 2009. "Persistence of full- and part-time farming in Southern China," China Economic Review, Elsevier, vol. 20(2), pages 360-371, June.
    11. Jin Yang & Hui Wang & Songqing Jin & Kevin Chen & Jeffrey Riedinger & Chao Peng, 2016. "Migration, local off-farm employment, and agricultural production efficiency: evidence from China," Journal of Productivity Analysis, Springer, vol. 45(3), pages 247-259, June.
    12. Wang, Hui & Riedinger, Jeffrey & Jin, Songqing, 2015. "Land documents, tenure security and land rental development: Panel evidence from China," China Economic Review, Elsevier, vol. 36(C), pages 220-235.
    13. Wang, Xiaobing & Herzfeld, Thomas & Glauben, Thomas, 2007. "Labor allocation in transition: Evidence from Chinese rural households," China Economic Review, Elsevier, vol. 18(3), pages 287-308.
    14. Alan de Brauw & John Giles, 2017. "Migrant Opportunity and the Educational Attainment of Youth in Rural China," Journal of Human Resources, University of Wisconsin Press, vol. 52(1), pages 272-311.
    15. Deininger, Klaus & Jin, Songqing, 2007. "Land rental markets in the process of rural structural transformation : productivity and equity impacts in China," Policy Research Working Paper Series 4454, The World Bank.
    16. Longfeng Ye & Peter E. Robertson, 2017. "Migration and Growth in China: A Sceptical Assessment of the Evidence," Economics Discussion / Working Papers 17-03, The University of Western Australia, Department of Economics.
    17. Li, Lihua & Bellotti, Bill & Komarek, Adam M., 2016. "Structural change and agricultural diversification since China’s reforms," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 5(2), September.
    18. Yamauchi, Futoshi, 2016. "Rising real wages, mechanization and growing advantage of large farms: Evidence from Indonesia," Food Policy, Elsevier, vol. 58(C), pages 62-69.
    19. Alan de Brauw & John Giles, 2018. "Migrant Labor Markets and the Welfare of Rural Households in the Developing World: Evidence from China," World Bank Economic Review, World Bank Group, vol. 32(1), pages 1-18.
    20. Yinyin Cai & Yew-Kwang Ng, 2014. "Part-Peasants: Incomplete Rural–Urban Labour Migration in China," Pacific Economic Review, Wiley Blackwell, vol. 19(4), pages 401-422, October.

    More about this item

    Keywords

    Agribusiness; Land Economics/Use; Research and Development/Tech Change/Emerging Technologies;
    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae15:212618. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.