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.
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