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Estimating the size of rural labour surplus in China - A dynamic general equilibrium analysis

Author

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  • Yinhua Mai
  • Xiujian Peng

Abstract

China's dramatic economic growth during the past three decades is characterised by rapid industrialisation that was fuelled by a large pool of rural surplus labour in the agricultural sector. The large scale movement of labour from the agricultural to the industrial and services sectors witness in recent years raises pertinent questions about its sustainability: is there still a pool of surplus labourers in rural China? If there is, how large is that pool and how long can it last? These questions are hotly debated in China. The present study contributes to that discussion by providing a quantitative framework to estimate the size of the surplus labour under various scenarios. Applying a dynamic general equilibrium model of the Chinese economy, we present our estimates of the size of the rural labour surplus from 1997-2005 and forecast its size from 2006-2015. Two scenarios are presented in this paper, one is business-as-usual; the other with accelerated improvement of labour productivity in China's agricultural sector.

Suggested Citation

  • Yinhua Mai & Xiujian Peng, 2009. "Estimating the size of rural labour surplus in China - A dynamic general equilibrium analysis," Centre of Policy Studies/IMPACT Centre Working Papers g-189, Victoria University, Centre of Policy Studies/IMPACT Centre.
    • Handle: RePEc:cop:wpaper:g-189
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    References listed on IDEAS

    as
    1. Yinhua Mai & Xiujian Peng & Peter B. Dixon & Maureen T. Rimmer, 2009. "The effects of facilitating the flow of rural workers to urban employment in China," Centre of Policy Studies/IMPACT Centre Working Papers g-188, Victoria University, Centre of Policy Studies/IMPACT Centre.
    2. Yinhua Mai & Xiujian Peng, 2012. "Estimating China's Rural Labor Surplus," Chinese Economy, Taylor & Francis Journals, vol. 45(6), pages 38-59, November.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Glyn Wittwer & Mark Horridge, 2010. "Bringing Regional Detail to a CGE Model using Census Data," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(2), pages 229-255.
    2. Menzies, Gordon & Xiao, Sylvia Xiaolin & Dixon, Peter & Peng, Xiujian & Rimmer, Maureen, 2016. "Rural-led exchange rate appreciation in China," China Economic Review, Elsevier, vol. 39(C), pages 15-30.

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    More about this item

    Keywords

    China; rural labour surplus; agriculture labour productivity; CGE model;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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