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

Luigi Minale

Journal of Economic Geography, 2018, vol. 18, issue 4, 795-821

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 (search for similar items in EconPapers)
JEL-codes: J22 J61 R23 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (20)

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Related works:
Working Paper: Agricultural Productivity Shocks, Labor Reallocation, and Rural-Urban Migration in China (2018)
Working Paper: Agricultural Productivity Shocks, Labor Reallocation, and Rural-Urban Migration in China (2018)
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