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Rural households decisions towards income diversification: Evidence from a township in northern China


  • Sylvie Démurger

    () (University of Lyon; CNRS, UMR 5824, GATE, France)

  • Martin Fournier

    () (University of Lyon; CNRS, UMR 5824, GATE, France)

  • Weiyong Yang

    () (University of International Business & Economics, Beijing, China)


Economic reforms in rural China have brought opportunities to diversify both within-farm activities and off-farm activities. Participation in these activities plays an important role in increasing rural households' income. This paper analyzes the factors that drive rural households and individuals in their income-source diversification choices for ten villages in Northern China. At the household level, we distinguish three types of diversification as opposed to grain production only : within farm (non- grain production) activities, local off-farm activities, and migration. At the individual level, we analyze the determinants of participation in three different types of jobs as compared to agricultural work : local off-farm employment, local self-employment and migration. At the household level, we find that land and labor availability stimulates on-farm diversification. Local off-farm activities are mostly driven by household wealth and credit constraints, while migration decisions strongly depend on the household age and composition. At the individual level, we find a clear gender and age bias in access to off-farm activities that are mostly undertaken by male and by young people. More surprisingly, education is found to play a role for accessing local wage employment but not in migration decision. As at the household level, the household assets position is found to strongly affect participation in any off-farm activity.

Suggested Citation

  • Sylvie Démurger & Martin Fournier & Weiyong Yang, 2009. "Rural households decisions towards income diversification: Evidence from a township in northern China," Working Papers 0923, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
  • Handle: RePEc:gat:wpaper:0923

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    References listed on IDEAS

    1. Démurger, Sylvie & Gurgand, Marc & Li, Shi & Yue, Ximing, 2009. "Migrants as second-class workers in urban China? A decomposition analysis," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 610-628, December.
    2. de Brauw, Alan & Huang, Jikun & Rozelle, Scott & Zhang, Linxiu & Zhang, Yigang, 2002. "The Evolution of China's Rural Labor Markets During the Reforms," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 329-353, June.
    3. 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.
    4. Alan de Brauw & Scott Rozelle, 2008. "Reconciling the Returns to Education in Off-Farm Wage Employment in Rural China," Review of Development Economics, Wiley Blackwell, vol. 12(1), pages 57-71, February.
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    Cited by:

    1. repec:eee:anture:v:66:y:2017:i:c:p:170-182 is not listed on IDEAS
    2. Wenjia Peng & Hua Zheng & Brian E. Robinson & Cong Li & Fengchun Wang, 2017. "Household Livelihood Strategy Choices, Impact Factors, and Environmental Consequences in Miyun Reservoir Watershed, China," Sustainability, MDPI, Open Access Journal, vol. 9(2), pages 1-12, January.
    3. Kimty Seng, 2015. "Welfare Effects of Diversification on Farm Households in Cambodia," Economics Bulletin, AccessEcon, vol. 35(4), pages 2645-2663.
    4. Jin, Yanhong & Fan, Maoyong & Cheng, Mingwang & Shi, Qinghua, 2014. "The economic gains of cadre status in rural China: Investigating effects and mechanisms," China Economic Review, Elsevier, vol. 31(C), pages 185-200.
    5. Katsushi S. Imai & Jing You, 2011. "Poverty Dynamics of Households in Rural China: Identifying Multiple Pathways for Poverty Transition," Discussion Paper Series DP2011-35, Research Institute for Economics & Business Administration, Kobe University.
    6. Chavez, M.D. & Berentsen, P.B.M. & Oude Lansink, A.G.J.M., 2014. "Analyzing diversification possibilities on specialized tobacco farms in Argentina using a bio-economic farm model," Agricultural Systems, Elsevier, vol. 128(C), pages 35-43.
    7. repec:gam:jsusta:v:9:y:2017:i:12:p:2290-:d:122309 is not listed on IDEAS
    8. Démurger, Sylvie & Fournier, Martin, 2011. "Poverty and firewood consumption: A case study of rural households in northern China," China Economic Review, Elsevier, vol. 22(4), pages 512-523.
    9. Katsushi S. Imai & Jing You, 2014. "Poverty Dynamics of Households in Rural China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(6), pages 898-923, December.
    10. Jinhong Wan & Ruoxi Li & Wenxin Wang & Zhongmei Liu & Bizhen Chen, 2016. "Income Diversification: A Strategy for Rural Region Risk Management," Sustainability, MDPI, Open Access Journal, vol. 8(10), pages 1-12, October.
    11. Solomon Zena Walelign, 2016. "Livelihood strategies, environmental dependency and rural poverty: the case of two villages in rural Mozambique," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 18(2), pages 593-613, April.
    12. Franz K. Huber & Michael Morlok & Caroline S. Weckerle & Klaus Seeland, 2015. "Livelihood Strategies in Shaxi, Southwest China: Conceptualizing Mountain–Valley Interactions as a Human–Environment System," Sustainability, MDPI, Open Access Journal, vol. 7(3), pages 1-26, March.

    More about this item


    income-source diversification; agricultural households; off-farm employment; China;

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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