Migration, Remittances, and Agricultural Productivity in China

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Migration, Remittances, and Agricultural
Productivity in China

• ------ ECN 5471 Assignment II

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Migration, Remittances, and Agricultural
Productivity in China

• Authors Rozelie, Scott Taylor, J. Edward
  Debrauw, Alan
• Source American Economic Review, May 99

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Content

• Productivity Effects and the New Economics of
  Labor Migration
• Methods
• Data
• Findings
• Conclusions

What factors trigger migration and motivate
migrants to remit a portion of their incomes?
How does large-scale migration affect
agricultural productivity?
Do remittances from migrants intensify or
compensate for the labor leaving villages?
70 China's labor force is in the agricultural
sector
10 increase per capita GNP 3.1 decrease
workforce employed in agriculture
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Productivity Effects and the New Economics of
Labor Migration
New economics of labor migration the
complexity of migration as an economic
institution the interrelationship between
migration's determinants and impacts, and
migrants
Stark migrants play the role of financial
intermediaries, enabling rural households to
overcome credit and risk constraints on their
ability to achieve the transition from familial
to commercial production.
Q fi(T, Zy).
household characteristics
c(T1) lt/ K, c'(T1) gt 0
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Methods

• YC ?o ?1M ?2R ?3ZY eY
• ?1, ?2 0
• R ao a1M ?3ZR eR
• M ßo ß1 ZM eM.

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FindingsMigration Effects
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Findings

• migration generates statistically significant
  lost-labor effects that depress yields
• the negative effect from less family labor is in
  part compensated by access to capital through
  increased remittances

An additional yuan remitted increases yield by
0.44 jin per mu
Remittances are a positive function of migration
increased remittances only partially offset the
migration effect
a one-person increase in migration is associated
with an 819-yuan increase in remittance income