Labor Force Participation and Structural Change

Loren Brandt, Chaoran Chen and Xiaoyun Wei

Working Papers from University of Toronto, Department of Economics

Abstract: Structural transformation can affect not only where people work, but also whether they participate in market work. We study this margin in China, where rapid movement out of agriculture coincided with a large decline in labor force participation. Using census and rural household data, we show that the post-2000 decline was concentrated among rural indi- viduals and broad-based across demographic groups and regions. We develop a quantitative model in which rural household members choose between market work and home production, subject to mobility barriers. Quantitatively, the model closely matches the observed decline without targeting it: agricultural productivity growth releases labor from agriculture and substantially reduces participation, while non-agricultural productivity growth only partially offsets this effect, as mobility barriers limit labor reallocation.

Keywords: labor force participation; home production; structural change; labor supply; labor mobility; within-household labor allocation; productivity growth; China (search for similar items in EconPapers)
JEL-codes: E02 E13 J21 J22 O11 O14 O41 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2026-08-14
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.economics.utoronto.ca/public/workingPapers/tecipa-826.pdf Main Text (application/pdf)

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:tor:tecipa:tecipa-826

Access Statistics for this paper

More papers in Working Papers from University of Toronto, Department of Economics 150 St. George Street, Toronto, Ontario.
Bibliographic data for series maintained by RePEc Maintainer ().