Essays on Chinese Rural Development

Abstract

This thesis is comprised of four research papers focusing on Chinese rural development issues. Using panel data from a survey conducted by the Research Centre for Rural Economy, the first two papers focus on rural-urban migration. The first paper (Chapter 2) examines the impact of rural-urban migration on agricultural (labour) productivity and finds that the lost-labour effect is greater than the compensating effect of off-farm income, resulting in a negative net impact of rural-urban migration on agricultural productivity. The second paper (Chapter 3) assesses the impact of rural-urban migration on the health status of migrants in China using an IV strategy, and finds that, contrary to earlier studies (that used flawed econometric techniques), migration actually worsens health, and especially for individuals who migrate continuously and stay in cities for a longer period. The two main mechanisms identified are (i) an income effect that makes migration beneficial for health, and (ii) a dominating industry effect that is negatively associated with health due to exposure to dangerous working environments.

In the third paper (Chapter 4), drawing on pooled data from two waves (2013 and 2015) of the China Health and Retirement Longitudinal Survey (CHARLS), I use Regression Discontinuity to identify the impact of the new rural pension scheme on land reallocation and show how this is linked to labor reallocation in response to the program. I show a significant increase in the amount of land rented out arising from the pension scheme, which is associated with an increase in the number of migrants among adult children. This, in turn, reduces the number of workers for farming and also helps to relax credit constraints. Despite the labour and land reallocation, I find no welfare and well-being gains for the elderly and their families.

Utilising the China Labour-force Dynamics Survey (CLDS) 2014, the fourth paper (Chapter 5) explores the role of 'inequality of opportunity' in individual earnings in rural China - that is, the share of overall inequality that can be attributed to 'circumstantial' factors over which individuals have no control, including family background, gender, ethnic minority status and region of birth. After finding an alarmingly high share of inequality of opportunity in overall earnings inequality (at 20.4%), I then examine the role of 'effort' in determining individual earnings, showing that key effort variables (such as off-farm employment and own education) are related to circumstances in ways that compound inequality of opportunity, rather than alleviating it.