From Farms to Factories: The Divergent Impact of Agriculture Import Growth on Labour Costs

Jie Li and Shi Jin

Journal of Development Studies, 2025, vol. 61, issue 12, 1968-1988

Abstract: This paper studies the differential effect of agriculture trade liberalisation on labor costs for high- vs. low-skilled industries in the manufacturing sector. With data from China, we employ a first-difference regression specification and exploit the fact that labour outflows from the agriculture sector are largely unskilled. We show that increases in agriculture imports are associated with declines in labour cost in the low-skilled manufacturing sector. Further analysis suggests that agricultural imports reallocate labour from the agricultural sector and into the manufacturing sector. Moreover, we observe an increased proportion of local rural workers in low-skill industries following agricultural import growth. At the extensive margin, we identify greater entries of firms in low-skilled industries. Findings in this paper offer evidence on the labour reallocation effect induced by agriculture trade liberalisation.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00220388.2025.2493808 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jdevst:v:61:y:2025:i:12:p:1968-1988

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/FJDS20

DOI: 10.1080/00220388.2025.2493808

Access Statistics for this article

Journal of Development Studies is currently edited by Howard White, Oliver Morrissey and Ken Shadlen

More articles in Journal of Development Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().