Agricultural productivity, labor migration, and agriculture-industry co-development
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| Title | Agricultural productivity, labor migration, and agriculture-industry co-development
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| Author | Jianguo Xu and Xun Zhang |
| Organization | (1. National School of Development, Peking University.2. School of Statistics, Beijing Normal University.3. Shanghai Finance Institute |
| Email | zhangxun@bnu.edu.cn |
| Key Words | Agricultural Productivity; Labor Migration; Capital Return; Agriculture and Industrialization |
| Abstract | We study China’s economic growth from the perspective of agricultural productivity improvement，rural-urban migration, and agricultural-industrial co-development. Toward this end, we develop a two-sector dynamic general equilibrium model. In the model, productivity improvement in the agricultural sector releases excess labor to the industrial sector, which promotes latter’s development and capital deepening. Capital deepening in the industrial sector further improves agricultural productivity and stimulates more labor migration to the industrial sector. Empirical analysis finds supportive evidence for this co-development effect. This paper provides a new perspective on understanding China economic miracle. It also casts light on how an underdeveloped economy can achieve endogenous and sustainable economic development. The policy implication is that China should reform land tenure and the household registration (hukou) system to facilitate the agricultural-industrial co-development effect and foster future growth potential. |
| Serial Number | WP926 |
| Time | 2015-09-30 |
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