An Empirical Analysis of the Lewis-Ranis-FEi Theory of Dualistic Economic Development for China

Marco Ercolani and Zheng Wei

Discussion Papers from Department of Economics, University of Birmingham

Abstract: We employ the Lewis-Ranis-Fei theory of dualistic economic development as a framework to investigate China's rapid growth over 1965-2002. We find that China's economic growth is mainly attributable to the development of the non-agricultural (industrial and service) sector, driven by rapid labour migration and capital accumulation. Our estimates of the sectoral marginal productivity of labour indicate that China's 1978 Economic Reform coincided with moving from phase one to phase tow growth, as defined in the Lewis-Ranis-Fei model. This implies that phase three growth could be achieved by commercialisation of the Chinese agricultural labour market.

Keywords: agricultural; development; dualistic growth; labour migration; subsistence (search for similar items in EconPapers)
JEL-codes: O14 O15 O18 O41 O47 O53 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2010-01
New Economics Papers: this item is included in nep-mig and nep-tra
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:bir:birmec:10-06

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