IDEAS home Printed from https://ideas.repec.org/a/zbw/espost/262399.html
   My bibliography  Save this article

Does a higher minimum wage accelerate labour division in agricultural production? Evidence from the main rice-planting area in China

Author

Listed:
  • Guo, Lili
  • Duan, Xiaoyu
  • Li, Houjian
  • Yang, Wanjiang
  • Ren, Yanjun
  • Guo, Yangli

Abstract

Agricultural production outsourcing, a new means of agricultural production, can optimise the allocation of resources, reduce agricultural production costs, and improve agricultural productivity. However, farmers' outsourcing behaviours are strongly interfered with by many factors such as economics, technology and institutions. Using a farmer-level data set from 2014 to 2018 in China, we examine the effects of the minimum wage increase on rice farmers' production outsourcing behaviours. Our study relies on a Logit regression framework and uses the control function (C.F.) approach to address potential endogeneity concerns. Results show that the minimum wage increase significantly reduces the probability of farmers conducting production outsourcing. We also examine the heterogeneous effects of the minimum wage increase, and find that compared with other outsourcing services, the adverse effects on harvesting outsourcing are the strongest; the negative effects on production outsourcing are stronger for rice farmers with higher education. Our results provide new insights into understanding how labour regulation affects labour division in agricultural production.

Suggested Citation

  • Guo, Lili & Duan, Xiaoyu & Li, Houjian & Yang, Wanjiang & Ren, Yanjun & Guo, Yangli, 2022. "Does a higher minimum wage accelerate labour division in agricultural production? Evidence from the main rice-planting area in China," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 35(1), pages 2984-3010.
    • Handle: RePEc:zbw:espost:262399
    DOI: 10.1080/1331677X.2021.1985573
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/262399/1/Guo_2022_higher_minimum_wage.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.1080/1331677X.2021.1985573?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Zhang, Linxiu & Huang, Jikun & Rozelle, Scott, 2002. "Employment, emerging labor markets, and the role of education in rural China," China Economic Review, Elsevier, vol. 13(2-3), pages 313-328.
    2. Bhaskar, V & To, Ted, 1999. "Minimum Wages for Ronald McDonald Monopsonies: A Theory of Monopsonistic Competition," Economic Journal, Royal Economic Society, vol. 109(455), pages 190-203, April.
    3. T Vernimmen & W Verbeke & G van Huylenbroeck, 2000. "Transaction cost analysis of outsourcing farm administration by Belgian farmers," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 27(3), pages 325-345, September.
    4. Jeffrey M. Wooldridge, 2015. "Control Function Methods in Applied Econometrics," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 420-445.
    5. Yamauchi, Futoshi, 2016. "Rising real wages, mechanization and growing advantage of large farms: Evidence from Indonesia," Food Policy, Elsevier, vol. 58(C), pages 62-69.
    6. Wenkai Sun & Xianghong Wang & Xiaoxi Zhang, 2015. "Minimum wage effects on employment and working time of Chinese workers——evidence based on CHNS," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-22, December.
    7. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Cheng & Nie, Kunxi & Zhu, Yueji, 2024. "Participation in land rental and labor markets and agricultural economic performance of banana farmers in China," Land Use Policy, Elsevier, vol. 146(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Caroline Krafft, 2020. "Why is fertility on the rise in Egypt? The role of women’s employment opportunities," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(4), pages 1173-1218, October.
    2. Doko Tchatoka, Firmin & Dufour, Jean-Marie, 2020. "Exogeneity tests, incomplete models, weak identification and non-Gaussian distributions: Invariance and finite-sample distributional theory," Journal of Econometrics, Elsevier, vol. 218(2), pages 390-418.
    3. Lenis Saweda O. Liverpool-Tasie, 2017. "Is fertiliser use inconsistent with expected profit maximization in sub-Saharan Africa? “Evidence from Nigeria”," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(1), pages 22-44, February.
    4. Li, Jiajia & Li, Houjian, 2022. "Spiritual support or living support: Which alleviates solid fuel use for rural households in ethnical minority regions of China?," Renewable Energy, Elsevier, vol. 189(C), pages 479-491.
    5. Liverpool-Tasie, Saweda & Nuhu, Ahmed Salim & Awokuse, Titus O. & Jayne, Thomas S. & Muyanga, Milu & Aromolaran, Adebayo & Adelaja, Adesoji, 2020. "Spillover effects of Medium-Scale Farms on Smallholder Behavior and Welfare: Evidence from Nigeria," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304606, Agricultural and Applied Economics Association.
    6. Wilko Letterie & Øivind Anti Nilsen, 2016. "Price Changes - Stickiness and Internal Coordination in Multiproduct Firms," CESifo Working Paper Series 5701, CESifo.
    7. Chen, Jiwei & Zhang, Zongli, 2024. "Family poverty and adolescents’ cognitive and noncognitive outcomes: Evidence from China," Economics & Human Biology, Elsevier, vol. 54(C).
    8. Abdul-Hanan Abdallah & Michael Ayamga & Joseph Agebase Awuni, 2023. "Large-Scale Land Acquisition and Household Farm Investment in Northern Ghana," Land, MDPI, vol. 12(4), pages 1-36, March.
    9. Thomas E. Guerrero & C. Angelo Guevara & Elisabetta Cherchi & Juan de Dios Ortúzar, 2021. "Addressing endogeneity in strategic urban mode choice models," Transportation, Springer, vol. 48(4), pages 2081-2102, August.
    10. Ogutu, Sylvester Ochieng & Qaim, Matin, 2019. "Commercialization of the small farm sector and multidimensional poverty," World Development, Elsevier, vol. 114(C), pages 281-293.
    11. Wilko Letterie & Øivind A. Nilsen, 2022. "Pricing Behaviour and Menu Costs in Multi‐product Firms," Economica, London School of Economics and Political Science, vol. 89(355), pages 746-769, July.
    12. Dang, Hai-Anh H. & Hiraga, Masako & Viet Nguyen, Cuong, 2022. "Childcare and maternal employment: Evidence from Vietnam," World Development, Elsevier, vol. 159(C).
    13. Awal Abdul‐Rahaman & Awudu Abdulai, 2020. "Vertical coordination mechanisms and farm performance amongst smallholder rice farmers in northern Ghana," Agribusiness, John Wiley & Sons, Ltd., vol. 36(2), pages 259-280, April.
    14. Zoungrana, Amelie, 2022. "Income diversification and food security:evidence from Burkina Faso," MPRA Paper 112337, University Library of Munich, Germany.
    15. William Liu, 2023. "A Theory Guide to Using Control Functions to Instrument Hazard Models," Papers 2312.03165, arXiv.org.
    16. Ma, Wanglin & Abdulai, Awudu, 2016. "Does cooperative membership improve household welfare? Evidence from apple farmers in China," Food Policy, Elsevier, vol. 58(C), pages 94-102.
    17. Owusu-Sekyere, Enoch & Bibariwiah, Cindy & Owusu, Victor & Donkor, Emmanuel, 2021. "Farming under irrigation management transfer scheme and its impact on yield and net returns in Ghana," Land Use Policy, Elsevier, vol. 102(C).
    18. André, Pierre & Dupraz, Yannick, 2023. "Education and polygamy: Evidence from Cameroon," Journal of Development Economics, Elsevier, vol. 162(C).
    19. Cheng Keat Tang & Jos van Ommeren, 2022. "Accident externality of driving: evidence from the London Congestion Charge [Pounds that kill: the external costs of vehicle weight]," Journal of Economic Geography, Oxford University Press, vol. 22(3), pages 547-580.
    20. Gao, Li & Zhang, Wendong & Mei, Yingdan & Sam, Abdoul G. & Song, Yu & Jin, Shuqin, 2018. "Do farmers adopt fewer conservation practices on rented land? Evidence from straw retention in China," Land Use Policy, Elsevier, vol. 79(C), pages 609-621.

    More about this item

    Keywords

    production outsourcing; minimum wage; control function (C.F.) approach; China;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D2 - Microeconomics - - Production and Organizations
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:espost:262399. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.