Agricultural productivity, structural change, and economic growth in post-reform China

Kang Hua Cao, Javier A. Birchenall*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

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 languageEnglish
Pages (from-to)165-180
Number of pages16
JournalJournal of Development Economics
Volume104
DOIs
Publication statusPublished - Sep 2013

User-Defined Keywords

  • China
  • Agricultural productivity
  • Structural change
  • Economic growth

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