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Agricultural Productivity Shocks, Labor Reallocation, and Rural-Urban Migration in China

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  • Luigi Minale

    (Universidad Carlos III de Madrid)

Abstract

This paper analyses the way households in rural China use rural-urban migration and off-farm work as a response to negative productivity shocks in agriculture. I employ various waves of a longitudinal survey to construct a panel of individual migration and labour supply histories, and match them to detailed weather information, which I use to instrument agricultural productivity. For identification, I exploit the year-by-county variation in growing season rainfalls to explain within-individual changes in labor allocation. Data on days of work supplied to each sector allow to study the responses to weather shocks along both the participation and the intensive margin. Results suggest that farming activity decreases by 4.5% while migration increases by about 5% in response to a 1-standard deviation negative rainfall shock. Increment in rural-urban migration derives from both longer spells in the city as well as raise in the likelihood to participate in the urban sector. I find interesting heterogeneous responses across generations driven by age-specific migration costs and changes in the relative productivity of sectors. Finally, land tenure insecurity seems to partially prevent households from freely reallocating labor away from farming in bad times.

Suggested Citation

  • Luigi Minale, 2018. "Agricultural Productivity Shocks, Labor Reallocation, and Rural-Urban Migration in China," CReAM Discussion Paper Series 1804, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  • Handle: RePEc:crm:wpaper:1804
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    Cited by:

    1. Chuang, Yating, 2019. "Climate variability, rainfall shocks, and farmers’ income diversification in India," Economics Letters, Elsevier, vol. 174(C), pages 55-61.
    2. Gröger, André, 2021. "Easy come, easy go? Economic shocks, labor migration and the family left behind," Journal of International Economics, Elsevier, vol. 128(C).
    3. Clement Imbert & Marlon Seror & Yifan Zhang & Stephan Yanos Zylberberg, 2018. "Migrants and Firms: Evidence from China," Bristol Economics Discussion Papers 19/713, School of Economics, University of Bristol, UK.
    4. Afridi, Farzana & Mahajan, Kanika & Sangwan, Nikita, 2021. "The Gendered Effects of Climate Change: Production Shocks and Labor Response in Agriculture," IZA Discussion Papers 14568, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Agricultural productivity; Labor supply; Rural-urban migration; China;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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