Abstract
We examine the role of agricultural productivity as a determinant of China's post-reform economic growth and sectoral reallocation. Using microeconomic farm-level data, and treating labor as a highly differentiated input, we find that the labor input in agriculture decreased by 5% annually and agricultural TFP grew by 6.5%. Using a calibrated two-sector general equilibrium model, we find that agricultural TFP growth: (i) accounts for the majority of output and employment reallocation toward non-agriculture; (ii) contributes (at least) as much to aggregate and sectoral economic growth as non-agricultural TFP growth; and (iii) influences economic growth primarily by reallocating workers to the non-agricultural sector, where rapid physical and human capital accumulation are currently taking place.
Original language | English |
---|---|
Pages (from-to) | 165-180 |
Number of pages | 16 |
Journal | Journal of Development Economics |
Volume | 104 |
DOIs | |
Publication status | Published - Sept 2013 |
User-Defined Keywords
- China
- Agricultural productivity
- Structural change
- Economic growth