Rural Labor Migration and Households' Land Rental Behavior: Evidence from China

• Date: 01 January 2018
• Author: Linxiu Zhang,Xianqing Ji,Tonglong Zhang,Zhonghao Qian
• Published date: 01 January 2018
• DOI: http://doi.org/10.1111/cwe.12229

©2018 Institute of World Economics and Politics, Chinese Academy of Social Sciences

China & World Economy / 66–85, Vol. 26, No. 1, 2018

66

Rural Labor Migration and Households’ Land Rental

Behavior: Evidence from China

Xianqing Ji, Zhonghao Qian, Linxiu Zhang, Tonglong Zhang*

Abstract

There has been growing debate about whether the changing demographic composition

due to rural labor migration could potentially threaten China’s agricultural productivity.

The Chinese Government is promoting the “three rights separation system” to

consolidate agricultural land through the land rental market with the explicit intention of

fostering new agricultural management subjects and improving agricultural productivity.

The present paper estimates the effect of rural labor migration on households’

participation in land renting in and renting out activities based on a unique dataset

from three rounds of nationally representative surveys. Our results indicate that rural

labor migration has a signicant negative eect on households renting in land and has a

positive eect on households renting out land in rural China. Therefore, the government

should adopt targeted policies to eectively encourage farmers with higher agricultural

capacity to rent in land to alleviate the negative eect of rural migration on households

renting in land. Supporting policies should guarantee that rural migrants enjoy the same

welfare services as urban residents.

Key words: agricultural productivity, households’ land rental behavior, rural labor

migration, rural–urban China

JEL codes: J21, J22, P25, Q13, Q15

I. Introduction

Over the past four decades, China has been on a rural–urban transformative development

trajectory. The urbanization level is a key indicator of this dynamic transition in rural–

*Xianqing Ji, Professor, Institute of National Governance and National Audit, Nanjing Audit University,

China. Email: jixianqing191@sina.com; Zhonghao Qian, Professor, Business School, Yangzhou University,

China. Email: zhqian@yzu.edu.cn; Linxiu Zhang, Professor, Institute of Geographical Sciences and Natural

Resources Research, Chinese Academy of Sciences, China. Email: lxzhang.ccap@igsnrr.ac.cn; Tonglong

Zhang, Professor, National School of Agricultural Institution and Development, South China Agricultural

Unive rsity, China. The authors acknowledge the nancial support of the National Natural Science Foundation of China

(Nos. 71673234 and 71333012), the National Social Science Foundation of China (No. 17BJL009), the Ministry of

Education Foundation of China (No. 16JZD024) and the Qinglan Project of Jiangsu Province, China.

©2018 Institute of World Economics and Politics, Chinese Academy of Social Sciences

Rural Labor Migration and Households’ Land Rental Behavior 67

urban China (Qin and Liao, 2016). Since China’s reform and opening up, a rapid

urbanization process has been sustained (Cao and Liu, 2011). The urban population

reached 51.27 percent at the end of 2011, when China’s urban population was more than

the rural population for the rst time (NBS, 2016). China’s urban population increased

from 17.9 percent in 1978 to 56.1 percent in 2015, with an average annual growth rate

of approximately 1 percent (Wang and Zhang, 2017). Sun et al. (2017) and Wei et al.

(2017) predict that there will be signicant and persistent regional dierences during the

process of urbanization (both between areas and within areas) as the urbanization rate

of each Chinese province increases during 2015–2030. Varying in terms of urbanization

level, rural areas and urban areas also exhibit different distributions of land, capital,

labor and technology (Zhang et al., 2007).

The quintessential feature of urbanization in China is the transfer of surplus

rural laborers from rural to urban areas in search of off-farm jobs. From the late

1970s, China’s economic reform (including the establishment of the household

responsibility system) triggered the growth of China’s o-farm economy and provided

new employment channels to rural laborers who had predominantly been engaged in

agriculture before 1978 (De Brauw et al., 2002; Wang et al., 2007). Liang and Ma (2004)

demonstrate that the intercounty migrant population grew from around 7 million in 1982

to nearly 22 million in 1990, 45 million in 1995 and then to 79 million by 2000. The

NBS (2011) reports that more than 261 million rural residents worked in urban areas

in 2010. Besides those rural migrants already residing in urban areas, Kassiola (2017)

predicts that there will be an additional 300 million rural migrants in China’s urban

areas by 2030. With such a signicant share of individuals moving out of rural areas,

the demographics in the rural villages are expected to change sharply (De Brauw et al.,

2013; Huang and Ding, 2015).

In the context of structural transition in rural–urban China, young and more

educated rural laborers prefer to migrate to cities to improve their living conditions

because of the huge income gap between rural and urban areas. At the same time, the on-

farm labor force is primarily mostly made up of middle-aged women, elderly men and

less educated rural laborers (Zhang et al., 2004; Aratame, 2006; Li et al., 2013). Some

researchers have demonstrated that the demographic composition of those laborers left

behind will have numerous effects on China’s agricultural productivity. Udry (1996)

and Peterman et al. (2011) show that the aging and the feminization of the labor force

have had a signicant negative eect on agricultural output.

Accompanying the burgeoning development of the rural–urban labor market, the

land rental market is currently another main driving factor of urbanization in China

(Min et al., 2017). By 2016, more than 30 percent of rural households participated in the