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Article
Publication date: 8 May 2018

Linxiu Zhang, Yongqing Dong, Chengfang Liu and Yunli Bai

The purpose of this paper is to evaluate the trend of off-farm employment in rural China over the past four decades since the reform and opening-up.

Abstract

Purpose

The purpose of this paper is to evaluate the trend of off-farm employment in rural China over the past four decades since the reform and opening-up.

Design/methodology/approach

Using two sets of panel survey data, the China National Rural Survey conducted in 2000 and 2008, and the China Rural Development Survey conducted in 2005, 2008, 2012 and 2016, this study offers a re-visit of China’s off-farm employment to give us the latest information about its evolution and whether rural labor markets have developed in a way that will allow them to facilitate the transformation of China’s economy more effectively. The evolution of off-farm employment is further examined through decomposition of types, destinations, industries, and population sub-groups as well as the change in the wage rate.

Findings

The data show the rapid increase in rural labor activities over the whole study period. Most notably, the authors findnd that a rapid rise in off-farm employment has continued even until after 2008 and into the mid-2010s, which is a time when some feared that macroeconomic conditions might keep rural residents on the farm or drive them back to the farm. In the disaggregation of labor market trends, the authors show that labor markets are acting consistently with an economy that is in transition from being dominated by agriculture to being dominated by other forms of production and with a population that is consistently becoming more urban.

Originality/value

The authors believe that the results will contribute positively to the exploration of answers to the question whether or not rural labor markets have developed in a way that will allow them to facilitate the transformation of China’s economy more effectively over the last four decades.

Details

China Agricultural Economic Review, vol. 10 no. 2
Type: Research Article
ISSN: 1756-137X

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Book part
Publication date: 23 November 2020

Tekalign Gutu Sakketa and Nicolas Gerber

Within the framework of potential efforts and strategies to employment generation for young people in Africa in general and Ethiopia in particular, the agricultural sector…

Abstract

Within the framework of potential efforts and strategies to employment generation for young people in Africa in general and Ethiopia in particular, the agricultural sector is increasingly considered as an important sector and a valuable means for poverty reduction, the promotion of economic development, and youth's economic independence. Renewed hope is placed on the sector to offer sustainable livelihood prospects for the rural youth. Yet, the success and sustainability of the sector require a proper understanding of how households allocate youth labor time in the sector and whether agricultural labor supply is responsive to economic incentives such as shadow wages. Using gender- and age-specific plot-level panel data, we systematically analyze the impacts of shadow wages of each household member on youth agricultural labor supply across types of farms. The results indicate that agricultural shadow wages matter for the youth's labor supply in the sector, but the impact differs for male and female youth. We also show that trends and patterns of youth labor supply vary across gender and whether they work on their own farm, and so do their labor returns. The results are consistent after controlling for individual heterogeneity and instrumenting for possible endogeneity. Taking into account the intensity of youth's actual involvement in the family farm, own farm or off-farm work instead of their stated intentions, the results challenge the presumption that youth are abandoning agriculture, at least in agricultural potential areas of Ethiopia. Instead, the frequent narrative of youth disengaging from agriculture may be a result of methodological flaws or data limitations. The findings suggest that it is necessary to invest in agricultural development to enhance labor productivity and employability of young people in agriculture.

Details

Change at Home, in the Labor Market, and On the Job
Type: Book
ISBN: 978-1-83909-933-5

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Article
Publication date: 8 January 2018

Ildephonse Musafiri and Pär Sjölander

Based on unique data the authors analyze the Rwandan non-farm employment expansion in rural areas and its relation to agricultural productivity. The purpose of this paper…

Abstract

Purpose

Based on unique data the authors analyze the Rwandan non-farm employment expansion in rural areas and its relation to agricultural productivity. The purpose of this paper is to analyze the factors that determine off-farm work hours in Rwanda, and how farmers’ off-farm employment affects agricultural output. Since production efficiency may depend on off-farm work and off-farm work depend on production efficiency (Lien et al., 2010), both production and off-farm work are endogenous. While controlling for endogeneity, the authors investigate the relationship between off-farm work and agricultural production.

Design/methodology/approach

In this paper the authors use a unique panel data set spanning over 26 years originating from household surveys conducted in the northwest and densely populated districts of Rwanda. Econometric estimations are based on a random effects two-stage Tobit model to control for endogeneity.

Findings

The study confirms theoretical and empirical findings from other developing countries that off-farm employment is one of the essential conditions for having an economically viable agricultural business and vice versa.

Research limitations/implications

The study is carried out in only one district of Rwanda. Even though most rural areas in Rwanda have similar features the findings cannot necessarily be generalized for the entire country of Rwanda. As in any study, the raw data set suffer from a number of shortcomings which cannot be fully eliminated by the econometric estimation, but this is a new data set which has the best data available for this research question in Rwanda.

Practical implications

The authors can conclude that there are synergy effects of investing government resources into both on-farm and off-farm employment expansions. Thus, in Rwanda on-farm investments can actually partly contribute to a future natural smooth transformation to more off-farm total output and productivity and vice versa. Though there are still limited off-farm employment opportunities in the studied area, there are considerable potentials to generate income and increase agricultural production through the purchase of additional inputs.

Social implications

The findings imply that a favorable business climate for off-farm businesses creates spill-over effects which enhance the smallholder farmers’ opportunities to survive, generate wealth, create employment and in effect reduce poverty.

Originality/value

From the best of the authors’ knowledge, similar studies have not been conducted in Rwanda, nor elsewhere with this type of data set. The findings provide original insights regarding off-farm and agricultural relationships in rural areas under dense population pressure. The results provide some indications that off-farm employment in developing countries (such as Rwanda) is one of the essential conditions for having an economically viable agricultural business and vice versa. The second wave of data was collected by the authors and was used solely for the purpose of this paper.

Details

Journal of Economic Studies, vol. 45 no. 1
Type: Research Article
ISSN: 0144-3585

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Book part
Publication date: 5 June 2013

Sylvie Démurger and Shi Li

This paper explores the rural labor market impact of migration in China using cross-sectional data on rural households for the year 2007. A switching probit model is used…

Abstract

This paper explores the rural labor market impact of migration in China using cross-sectional data on rural households for the year 2007. A switching probit model is used to estimate the impact of belonging to a migrant-sending household on the individual occupational choice categorized in four binary decisions: farm work, wage work, self-employment, and housework. The paper then goes on to estimate how the impact of migration differs across different types of migrant households identified along two additional lines: remittances and migration history. Results show that individual occupational choice in rural China is responsive to migration, at both the individual and the family levels, but the impacts differ: individual migration experience favors subsequent local off-farm work, whereas at the family level, migration drives the left-behinds to farming rather than to off-farm activities. Our results also point to the interplay of various channels through which migration influences rural employment patterns.

Details

Labor Market Issues in China
Type: Book
ISBN: 978-1-78190-756-6

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Article
Publication date: 11 May 2010

Xiaofei Li, Chengfang Liu, Renfu Luo, Linxiu Zhang and Scott Rozelle

The paper aims to discuss whether the younger generation of China's rural labor force is prepared, in terms of education level or labor quality, for the future labor…

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Abstract

Purpose

The paper aims to discuss whether the younger generation of China's rural labor force is prepared, in terms of education level or labor quality, for the future labor markets under China's industrial upgrading.

Design/methodology/approach

Using nationally representative survey data, the paper gives detailed discussions on the young rural laborers' education attainments, and their off‐farm employment status including job patterns, working hours, and hourly wage rates. The relationship between education and employment status is analyzed and tested. Through these discussions, an employment challenge is revealed, and some policy implications are made.

Findings

This paper finds that China's young rural laborers are generally poorly educated and mainly unskilled. They work long hours and are low paid. While they lack the labor quality that will be required to meet the industrial upgrading, an employment challenge may face them in the near future. This paper also finds a strong link between education levels and employment status for the young labor force, which implies the possible effect of policies such as improving rural education.

Originality/value

Based on a solid foundation of a national rural household survey, this paper updates the understanding of the education and employment situations of the young rural labor force in contemporary China. The concern about the employment challenges raised in the paper is related to the future of China's rural labor transition and the whole economy.

Details

China Agricultural Economic Review, vol. 2 no. 2
Type: Research Article
ISSN: 1756-137X

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Article
Publication date: 30 October 2019

Li Li, Atsushi Tsunekawa, Ian MacLachlan, Guicai Li, Atsushi Koike and Yuanyuan Guo

The purpose of this paper is to examine the factors (including conservation payments) that influence household decisions to participate in off-farm work and estimate the…

Abstract

Purpose

The purpose of this paper is to examine the factors (including conservation payments) that influence household decisions to participate in off-farm work and estimate the impact of participation on household welfare under the auspices of the Grain for Green (GfG) program.

Design/methodology/approach

The authors used survey data from 225 farm households on the Loess Plateau and addressed the possible sample selection and endogeneity problems by employing a jointly estimated endogenous switching regression (ESR) model.

Findings

The findings of this paper are as follows: off-farm participation is positively related to households’ educational attainment and negatively related to their land resource endowment and the presence of children; participation in off-farm work exerts positive effects on household income and per capita household income, but negative effects on farm productivity; and conservation payments show no significant impact on off-farm participation, no significant impact on any of the three household welfare indicators for off-farm non-participant households, but a significantly negative impact for off-farm participant households.

Originality/value

This paper makes two contributions. First, the authors address the selection bias and endogeneity problem of GfG participating households by employing the ESR method and explicitly estimating the treatment effects of off-farm participation on their household welfare. Neglecting these problems leads to biased estimates and misleading policy implications. Second, this analysis stresses the important role of government in reducing market or institutional failure and other barriers that impede farmers’ efficient allocation choices instead of compensating households for conserving sloping land, shedding new light on the most effective policy options to achieve the program’s goals.

Details

China Agricultural Economic Review, vol. 12 no. 1
Type: Research Article
ISSN: 1756-137X

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Article
Publication date: 2 May 2017

Qihui Chen, Jingqin Xu, Jiaqi Zhao and Bo Zhang

The purpose of this paper is to estimate the returns to rural schooling in China, addressing both endogeneity in rural individuals’ schooling and self-selection into off-farm work.

Abstract

Purpose

The purpose of this paper is to estimate the returns to rural schooling in China, addressing both endogeneity in rural individuals’ schooling and self-selection into off-farm work.

Design/methodology/approach

This paper exploits geographical proximity to rural secondary schools to create instrumental variables (IV) for individuals’ years of schooling. It addresses both endogenous schooling and self-selection using the two-step procedure developed in Wooldridge (2002, p. 586).

Findings

The preferred IV estimate of schooling returns, 7.6 percent, is considerably higher than most previous estimates found in rural China.

Originality/value

This paper is among the few papers that examine returns to rural schooling in China while simultaneously addressing both endogeneity in individuals’ schooling and self-selection into off-farm work. Its findings suggest that rural education in China is potentially able to generate a respectable level of economic returns if policies are designed to provide greater school accessibility to rural individuals.

Details

China Agricultural Economic Review, vol. 9 no. 2
Type: Research Article
ISSN: 1756-137X

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Article
Publication date: 27 July 2018

Weidong Wang, Yongqing Dong, Renfu Luo, Yunli Bai and Linxiu Zhang

The purpose of this paper is to examine the role of education in the labor market and to understand how returns to education change over time in rural China.

Abstract

Purpose

The purpose of this paper is to examine the role of education in the labor market and to understand how returns to education change over time in rural China.

Design/methodology/approach

Using nationally representative survey data from 2004 to 2015, this study provides insights on wage determination in the labor market and examines how the returns to education in rural China differ with time and educational endowment. This study applies ordinary least squares estimation and the Heckman selection model to estimate the returns to education.

Findings

The returns to education decreased during the observed years from more than 6 percent in 2004 to only about 3 percent in 2011, rising to nearly 4 percent in 2015. The overall trend is robust and observed within groups defined by education. Additionally, the returns to education vary greatly with educational endowment. Tertiary education has always maintained a high rate of returns at nearly 10 percent, while returns to senior high school education and below have gradually diminished.

Originality/value

The authors believe that the results will not only enrich studies on the returns to education in rural China, but also provide a basis for diagnosing the changes of rural labor market in the early twenty-first century.

Details

China Agricultural Economic Review, vol. 11 no. 1
Type: Research Article
ISSN: 1756-137X

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Article
Publication date: 9 March 2021

Yunli Bai, Tianhao Zhou, Zhiyuan Ma and Linxiu Zhang

The purpose of this paper is to examine the role of infrastructure on the income growth and poverty reduction of rural household in China by estimating the impact of road…

Abstract

Purpose

The purpose of this paper is to examine the role of infrastructure on the income growth and poverty reduction of rural household in China by estimating the impact of road accessibility on the extent of household off-farm employment and its heterogeneous effects among the groups with different income level and earning capacity.

Design/methodology/approach

Using nationally representative panel data collected in 100 villages about 2000 households across five provinces in 2005, 2008, 2012, 2016 and 2019. This study adopts Tobit model with panel data, zero-inflated Poisson model and static nonbalanced panel model to yield consistent results.

Findings

We find that road accessibility generally has no effect on the number of off-farm laborers and duration of off-farm employment. However, road accessibility is not beneficial for the households in the low-income villages or with low educational attainment, but it benefits the households in the high-income villages by promoting local off-farm employment or with high educational attainment by increasing the duration of migrant off-farm employment.

Originality/value

This study identifies the heterogeneous effects of road accessibility on the extent of off-farm employment among rural households, which narrows the research gap and enriches the literature. The empirical findings imply that road accessibility widens the gap between rich and poor in off-farm employment, which is of great important to the alleviation of relative poverty after 2020 in China.

Details

China Agricultural Economic Review, vol. 13 no. 3
Type: Research Article
ISSN: 1756-137X

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Article
Publication date: 6 November 2017

Kaleb Shiferaw, Berhanu Gebremedhin and Dereje Legesse Zewdie

The purpose of this paper is to explore the factors that affect farmer’s decision to allocate credit for livestock production. The results are expected to contribute to…

Abstract

Purpose

The purpose of this paper is to explore the factors that affect farmer’s decision to allocate credit for livestock production. The results are expected to contribute to the understanding of what motivates smallholders to allocate credit to agricultural production in general and livestock production in particular. A better understanding of the farmers’ behavior in allocating credit for livestock would provide useful information for project implementers and financial institutions that work with small-scale livestock producers.

Design/methodology/approach

A cross-section data set collected in 2014 from 5,000 households and 497 rural communities in the major highland regions of Ethiopia is examined. The authors developed a conceptual framework for credit allocation decision. Percentiles, means, and standard deviation as well as t, χ2 and Fisher’s exact tests for association and Cramer’s V measure for strength of association have been used to describe the status of farmer’s access to credit and analyze credit utilization, while a three-stage probit model with double sample selection is used to identify factors that affect household’s decision to allocate credit for livestock production.

Findings

After controlling for potential selection biases, sex and literacy status of household head, land size, wealth and access to livestock centered extension service are found to have a statistically significant effect on farmers’ decision to allocate credit to livestock production. The results showed female-headed households, wealthy farmers, farmers with small plot of land and farmers that have access to livestock centered extension services are more likely to allocate the credit for livestock production. The results suggest that policies aimed at improving access to credit together with access to livestock focused extension service are more effective in increasing livestock production.

Research limitations/implications

The study’s findings should be viewed with perspective and caution, as only households with excess demand for credit were the subject of the research.

Originality/value

The contribution of this paper is twofold. First, it is one of a very few empirical studies that try to identify factors that affect households credit allocation to livestock in systematic way that removed confounding effects using three-stage probit models. Given the emphasis on financial constraints in livestock development, new empirical insights on household credit allocation are essential to better inform development interventions. Second, the analysis relies on a comprehensive data set that represents the major agricultural system of the country.

Details

Agricultural Finance Review, vol. 77 no. 4
Type: Research Article
ISSN: 0002-1466

Keywords

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