Rural Labor Migration and Poverty Reduction in China

• DOI: http://doi.org/10.1111/cwe.12220
• Date: 01 November 2017
• Author: Yang Du,Peng Jia,Meiyan Wang
• Published date: 01 November 2017

©2017 Institute of World Economics and Politics, Chinese Academy of Social Sciences

China & World Economy / 45–64, Vol. 25, No. 6, 2017

45

Rural Labor Migration and

Poverty Reduction in China

Peng Jia, Yang Du, Meiyan Wang*

Abstract

Using various sources of data, this paper examines the contributions of rural labor

migration to economic growth and poverty reduction in China. The results show that

there is still a signicant number of people living in poverty in rural areas, while the

eectiveness of migration on poverty reduction has declined, implying an urgent need

for new approaches to poverty reduction. China’s experiences could also be valuable for

the formulation of development strategies in other developing countries.

Key words: poverty reduction, rural labor migration, social protection

JEL codes: I32, R23

I. Introduction

China’s sustained high-speed economic growth over the past 40 years has been

remarkable, and has made it possible for China to improve the well-being of

approximately one-fth of the human population.

Since its reform and opening up in 1978, China has been in the process of correcting

the old, distorted economic system. The old system, before 1978, featured traditional

labor protection policies in favor of developing heavy industries. The old system also

divided rural and urban labor markets, led to full urban employment, and was based on

an urban-biased social security and welfare system. There were two major problems

with the old system. First, the rural–urban separation led to low eciency in resource

allocation. Second, urban workers lacked incentive to work.

Rural labor migration plays a vital role in correcting the problems mentioned

above. As argued by development economists, the process of transforming from a dual

*Peng Jia, Assistant Professor, Institute of Population and Labor Economics, Chinese Academy of Social

Sciences, China. Email: jiapeng@cass.org.cn; Yang Du, Professor, Institute of Population and Labor

Economics, Chinese Academy of Social Sciences, China. Email: duyang@cass.org.cn; Meiyan Wang,

Professor, Institute of Population and Labor Economics, Chinese Academy of Social Sciences, China. Email:

wangmy@cass.org.cn. The authors are grateful for financial support from the National Natural Science

Foundation of China (Grant Nos. 71473267 and 71642003).

Peng Jia et al. / 45–64, Vol. 25, No. 6, 2017

©2017 Institute of World Economics and Politics, Chinese Academy of Social Sciences

46

economy to a modern economy requires the transfer of the labor force from traditional

sectors to modern sectors. The migration of China’s rural laborers into urban areas and

non-agricultural sectors since 1978 represents one of the biggest migrations in human

history (Roberts, 2007). Several reasons are behind this large-scale migration. The

rst reason is a “compensation eect.” As a direct consequence of the heavy-industry-

oriented strategy adopted before 1978, the separation between the urban and rural

systems created abnormal imbalances in the urban–rural population.1 The massive rural

labor migration after 1978, to a large extent, is a consequence of the shift away from

the old distorted system, under which the rural population were largely restricted to

living in the countryside. The second reason is a “development eect.” The rural labor

migration was an unavoidable result following the dramatic changes in rural–urban and

agricultural–non-agricultural systems over the past several decades. The third reason

is a “pushing eect.” The low agricultural productivity under the traditional economy

pushed rural surplus laborers to migrate out from the limited cultivated lands. Based

on the reasons above, migration of China’s rural laborers to urban areas and non-

agricultural sectors will continue until China’s economic system completes its transition.

Rural labor migration in China has been a constantly-changing social phenomenon

with complex and varied characteristics. First, the overall size of the rural migrant

population has been increasing. According to an annual survey of rural migrant workers

conducted by the National Bureau of Statistics of China (NBS), a total of 169 million

rural laborers went to cities seeking jobs in 2015 (NBS, 2016b). In fact, rural migrant

workers have gradually become the primary source of non-agricultural economic

growth. Second, the average age of rural migrant workers has been increasing, as the

share of young adult migrants has continued to fall. Third, the destination for rural

migrant workers has shifted from the eastern (e.g. Yangtze River Delta and Pearl

River Delta) to the central and western provinces. Finally, institutional barriers are still

restricting the ow of rural laborers.

Rural labor migration has a profound impact on poverty reduction. Rural poor areas

tend to have a shortage of capital and are often situated in distant and isolated locations,

where severe natural conditions impede economic development. Under such unfavorable

conditions, labor becomes the most important productive element that rural low-income

families have. Once rural laborers have the opportunity to join non-agricultural sectors,

rural poverty could be reduced by making use of resources in developed areas.

Several papers have studied the relationship between labor migration and poverty

1In 1978, approximately 82.08 percent of the total Chinese population lived in the countryside. This proportion

dropped to 42.65 percent in 2016. See http://www.stats.gov.cn for more details.