Wage growth, landholding, and mechanization in Chinese agriculture

Xiaobing Wang, Futoshi Yamauchi, Keijiro Otsuka and Jikun Huang

No 7138, Policy Research Working Paper Series from The World Bank

Abstract: This paper uses farm panel data from China to examine the dynamics of land transactions, machine investments, and the demand for machine services. Recently, China's agriculture has experienced a large expansion of machine rentals and machine services provided by specialized agents, which has contributed to mechanization of agricultural production. The empirical results show that an increase in nonagricultural wage rates leads to expansion of self-cultivated land size. A rise in the proportion of nonagricultural income or the migration rate also increases the size of self-cultivated land. Interestingly, however, relatively educated farm households decrease the size of self-cultivated land, which suggests that relatively less educated farmers tend to specialize in farming. The demand for machine services has also increased if agricultural wage and migration rate increased over time, especially among relatively large farms. The results on crop income support the complementarity between rented-in land and machine services (demanded), which implies that scale economies are arising in Chinese agriculture with mechanization and active land rental markets.

Keywords: Rural Development Knowledge&Information Systems; Economic Growth; Labor Policies; Regional Economic Development; Land Use and Policies (search for similar items in EconPapers)
Date: 2014-12-01
New Economics Papers: this item is included in nep-agr, nep-cna and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Wage Growth, Landholding, and Mechanization in Chinese Agriculture (2016)
Working Paper: Wage Growth, Landholding and Mechanization in Chinese Agriculture (2015)
Working Paper: Wage Growth, Landholding and Mechanization in Chinese Agriculture (2015)
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