Rural labor allocation and farm technology

Abstract

Whether the agricultural and rural industrial sectors compete for key resources, particularly labor, is an important policy question. This paper investigates the determinants of the inter−sectoral flow of labor between farm and off −farm activities, using data from Tianjin, China. Specifically we investigate whether the labor flows are explained by the level of agricultural technology employed by rural households, where the technologies can have positive or negative impacts on farmers’ incentives to remain on the farm. Our model specification and data set allow us to bridge macroeconomic and microeconomic issues in the labor allocation decision that do not appear to have been addressed elsewhere.