Abstract
Purpose - The purpose of this paper is to identify the effects of recent demographic transition and rising labor costs on agricultural production structure and pattern in China during 1998-2012.
Design/methodology/approach - The authors, first, theoretically discuss the effects of changing relative input prices due to rising labor cost on producers’ decisions regarding input mix (substitution effect), output level, and product quality (output effect). A logarithmic mean Divisia index decomposition method is then applied to empirically identify these effects at aggregated levels, followed by an analysis based on the visualization of land use indicators on changing cropping patterns across Chinese provinces.
Findings - The authors find that tightened effective agricultural labor supply and rises in rural labor costs are associated with divergent changes in input mixes and output choices across products. Producers of land-intensive products focusing more on input mix adjustment, while those of labor-intensive products seem to more likely to adjust output choices. Producers’ adaption strategies also varied across Chinese provinces due to natural conditions, leading to shifts and concentrations in the regional distribution of agricultural products, with lower-value bulk products concentrating in the plain areas, whereas higher-value horticulture products increasingly prevailing in sloped areas.
Originality/value - This paper illustrates how adjustments in input mixes and output choice in Chinese agriculture counteracted disadvantages caused by rising labor costs and how such adjustments are product and region specific. Based on these observations, implications regarding further innovations in production technology and institutional arrangements needed within China’s agricultural sector are highlighted in the paper.
Keywords: Chinese agriculture, Demographic transition; Induced innovation hypothesis; Input/output mix change; Regional comparative advantage; Rural labour costs
Tianxiang Li, Wusheng Yu, Tomas Baležentis, Jing Zhu, Yueqing Ji. 2017 Rural demographic change, rising wages and the restructuring of Chinese agriculture, China Agricultural Economic Review, Vol. 9 Issue: 4, pp.478-503, https://doi.org/10.1108/CAER-02-2016-0025 ISSN 1756-137X [APEL - Asia Pacific Economic Literature, Australian Business Deans Council (ABDC) Journal Quality List;Cabell's Directory, Academic Search Alumni Edition/Academic Search Complete/Academic Search Elite/ Academic Search Premier/ Business Source Alumni Edition/ Business Source Complete/ Business Source Corporate Plus, Business Source Elite/ Business Source International/ Business Source Premier (EBSCO), ECONIS, INSPEC, International Bibliography of Social Sciences, Journal Citation Reports/ Science Edition; Current Contents/ Agriculture, Biology, and Environemental Sciences, ProQuest, The Publication Forum (Finland), ReadCube Discover, RePEc, Science Citation Index Expanded (also known as SciSearch), Scopus, Social Sciences Citation Index, Current Contents/ Social Behavioural Sciences].
Clarivate Analytics: 2016 Impact Factor: 0.577
5-year Impact Factor (2016): 0.694
Scopus: CiteScore 2016: 0.62
CiteScoreTracker 2017: 0.62
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