Does unstable off-farm employment cause stagnant farmland rent-out in rural China?

Abstract

Purpose

This paper aims to examine the impacts of unstable off-farm employment on the probability and stability of farmland rent-out and explore its mechanisms.

Design/methodology/approach

The paper adopts Ordinary Least Squares (OLS), Probit, Tobit, Order probit models with two-way fixed effects to conduct empirical analysis based on the balanced panel data collected in 2016 and 2023 with a national representativeness sample of 1,206 rural households in 100 villages across 5 provinces in China.

Findings

The empirical results showed that unstable off-farm employment had negative effects on the probability of farmland rent-out, but it had no effects on the stability of farmland rent-out. The mechanism analysis showed that unstable off-farm employment affected the probability of farmland rent-out by decreasing the probability of purchasing houses in city and endowment insurance with high pension. Heterogeneity analysis indicated that the negative effect of unstable off-farm employment was much larger for the households with higher share of labor engaging in off-farm employment outside home county, elder members in the households and those located in the villages of mountain areas.

Originality/value

This paper is the first to define the unstable off-farm employment from the perspective of incontiguous off-farm employment for several years, which could capture the normality rather than particular case in a certain year of off-farm employment among rural labors. Using these new measurements of unstable off-farmland, this paper examined the impacts and mechanisms of share of unstable off-farm employment on the probability and stability of farmland rent-out.

Citation

Cao, Y., Zhou, D. and Bai, Y. (2024), "Does unstable off-farm employment cause stagnant farmland rent-out in rural China?", China Agricultural Economic Review, Vol. 16 No. 3, pp. 545-567. https://doi.org/10.1108/CAER-12-2023-0353