The Agricultural Production and Price Effects of the Rural Labor Force Transfer
CAO Bing-xue1,2, YANG Xiao-wei2, HE Fang3
1. School of Agricultural Economics and Rural Development, Renmin University of China, Beijing 100872, China; 2. Business School, Beijing Normal University, Beijing 100875, China; 3.China Institute of Nuclear Information & Economics,Beijing 100048, China
This paper analyzes the effect of rural labor transfer on the price of agricultural products in China. Based on Hu Jingbei’s (2008) model, by distinguishing “absolute” and “relative” surplus labor force, we construct a mathematical model of the relationship among urbanization, transfer of rural labor and prices of agricultural products. The model demonstrates that given agricultural technology and rigid demand of agricultural products, the transfer of “absolute surplus labor force” to cities doesn’t affect the agricultural production and prices while the continued transfer of “relative surplus labor force” leads to the decrease of agricultural supply and increase of agricultural prices. The tests made by overall agricultural production and labor-intensive agricultural products verify the above conclusion.
AHITUV A, KIMHI A. 2002. Off-farm work and capital accumulation decisions of farmers over the life-cycle: the role of heterogeneity and state dependence [J]. Journal of Development Economics, 68 (2): 329-353.
JEFFERSON G H, RAWSKI T G. 1994. How industrial reform worked in China: the role of innovation, competition and property rights [J].World Bank Economic Review,8(1):129-157.
KHAN S, HANJRA M A, MU J. 2009. Water management and crop production for food security in China: a review [J]. Agricultural Water Management, 96(3): 349-360.
LEWIS W A. 1954. Economic development with unlimited supplies of labour [J].The Manchester School, 22(2): 139-191.
RANIS G, FEI J C H. 1961. A theory of economic deve-lopment [J]. The American Economic Review, 51 (4): 533-565.
TODARO M P. 1969. A model for labor migration and urban unemployment in less developed countries [J]. The American Economic Review, 59(1): 138-148.