1 / 25

Motivations

The Decline of China’s Agricultural Labor force Share Yang Chengyu Beijing Normal University June 15th, Budapest. Motivations.

marli
Download Presentation

Motivations

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Decline of China’s Agricultural Labor force ShareYang ChengyuBeijing Normal UniversityJune 15th, Budapest

  2. Motivations • Since the late 1970s, the labor share in agricultural sector has experienced a period of significant decline: the share of agriculture labor force decline from 70.7% in 1978 to 36% in 2010. Faster than the average of OECD, following the same styles of Korea and Taiwan.

  3. Agriculture Labor Share 1952-2011 in % Solid: actual, Dashed: segmented linear trend

  4. International Comparison 1880s-1990s Japan, Korea, China Taiwan, OECD, China

  5. Research Questions • What are the main reasons for the decline in China’s agricultural labor share? • Will China’s agricultural labor share continue to decline and how?

  6. Brief Literature Review • Difference in sector productivities Baumol (1967), Ngai and Pissarides (2007) • Change in consumption preference Kongsamut et al. (2001) • Government intervention Imrohoroglu et al. (2012), Duarte and Restuccia (2010), Rogerson (2008)

  7. This paper • A two-sector general equilibrium model • Differences in sector labor productivities

  8. Theoretical Background • According to the Standard Neo-Classical theory, the structural change of industry is driven by both the supply and demand side of the economy. • On the supply side, the transition of labor force is driven by the different sector productivities. • On the demand side, the Engle’s law is another main factor that contribute to the sector transition of the labor force. • The institutional factors: Hukou, Market Oriented Economy and the personal credit system .

  9. Measurement: Sector productivity • Average Productivity vs Total Factor Productivity • Identification errors and neglecting of human capital  underestimate of agricultural work time  overestimate of agricultural productivity Gollin et al. (2012)

  10. Average labor productivities in Agriculturaland non-agricultural sectors (1978-2010)Solid: Non-Agri, Marked: Agriculture

  11. Change Rates of Sector Productivity Bold: Non-agri Thin: Agricultural

  12. Change Rates of Agricultural Labor Share 1978-2011 in % 数据来源:国家统计局

  13. Government Intervention • Nominal rete of assistance (NRA) • - Price regulation, subsidies, agricultural product sales policies • - Exchange rate, trade protection policies • Relative rate of assistance (RRA)

  14. Government Intervention: Relative Rate of Assistance (RRA) Data source: World Bank 数据来源:世界银行

  15. The Basic Model

  16. The Basic Model

  17. The Basic Model

  18. Simulation Result: Basic ModelSolid: Actual, Dashed: Simulated

  19. Model with Government Interference • Following Imrohoroglu et.al. (2012) we assume that agricultural sector need non-agricultural products “X” as intermediate input to produce Agricultural goods as well as labor force. However, the government can intervene the relative price , to the non-agricultural good.

  20. Model with Government Intervention: firm • The price of the intermediate goods X is set to by the government • The problem faced by Agriculture sector is: • The second equation hold because of the foc of non-agricultural sector’s problem

  21. Model with Government intervention

  22. Model Simulation with Government InterventionSolid: actual, Dashed: simulated

  23. Estimate the growth of sector productivity

  24. Estimate and forecast of the share of agriculture labor force

  25. Main Findings 1. The change and difference of sector productivity is the main driving force of labor force sector transition. 2. In the future, this process will continue, but the speed will slow down.

More Related