Journal Article

Agricultural productivity shocks, labour reallocation and rural–urban migration in China

Luigi Minale

in Journal of Economic Geography

Volume 18, issue 4, pages 795-821
Published in print July 2018 | ISSN: 1468-2702
Published online March 2018 | e-ISSN: 1468-2710 | DOI: https://dx.doi.org/10.1093/jeg/lby013
Agricultural productivity shocks, labour reallocation and rural–urban migration in China

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  • Demand and Supply of Labour
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Abstract

This article 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 labour 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 is reduced by 4.5% and migration increased by about 5% in response to a 1 standard deviation negative rainfall shock. Increase in rural–urban migration derives from both longer spells in the city and from increment in the likelihood to participate in the urban sector. I find interesting heterogeneous response across generations driven by age-specific productivities in the different sectors and migration costs. Finally, land tenure insecurity seems to partially prevent households from freely reallocating labour away from farming in bad times.

Keywords: Agricultural productivity; labour supply; rural–urban migration; China; J22; R23; J61

Journal Article.  10744 words.  Illustrated.

Subjects: Demand and Supply of Labour ; Household Analysis ; Mobility, Unemployment, and Vacancies

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