Off-farm employment over the past four decades in rural China

Abstract

Purpose The purpose of this paper is to evaluate the trend of off-farm employment in rural China over the past four decades since the reform and opening-up. Design/methodology/approach Using two sets of panel survey data, the China National Rural Survey conducted in 2000 and 2008, and the China Rural Development Survey conducted in 2005, 2008, 2012 and 2016, this study offers a re-visit of China’s off-farm employment to give us the latest information about its evolution and whether rural labor markets have developed in a way that will allow them to facilitate the transformation of China’s economy more effectively. The evolution of off-farm employment is further examined through decomposition of types, destinations, industries, and population sub-groups as well as the change in the wage rate. Findings The data show the rapid increase in rural labor activities over the whole study period. Most notably, the authors findnd that a rapid rise in off-farm employment has continued even until after 2008 and into the mid-2010s, which is a time when some feared that macroeconomic conditions might keep rural residents on the farm or drive them back to the farm. In the disaggregation of labor market trends, the authors show that labor markets are acting consistently with an economy that is in transition from being dominated by agriculture to being dominated by other forms of production and with a population that is consistently becoming more urban. Originality/value The authors believe that the results will contribute positively to the exploration of answers to the question whether or not rural labor markets have developed in a way that will allow them to facilitate the transformation of China’s economy more effectively over the last four decades.