THE RISE OF RURAL-TO-RURAL LABOR MARKETS IN CHINA

The Growth of Rural-to-Rural Labor

While China’s success at generating off-farm work opportunities for its rural
workers is well known, what is less well known is that many of the new jobs are in rural
areas and go to workers from other villages. In 1988, only about 1 percent of the rural
labor force found employment in another rural village (table 1, row 9, column 4). By
1995, 5 percent of rural workers were employed in a rural village outside of their home
village (column 1).

The increase in the size of the rural labor force, the rapid rise in the proportion of
rural workers who leave their home village for work, and the increasing share of those
workers heading to other rural villages have contributed to the expansion in rural-to-rural
labor movement. Rural-to-rural movement represents the fastest growing off-farm
employment sector in rural China, with an annual growth rate of 27 percent compared to
13 percent growth in local employment and 9 percent growth in rural-to-urban movement
(table 1, rows 3, 6 and 9, column 7). Growth in rural-to-rural migration was especially
high at 38 percent annually (row 11). We estimate that there were 12.9 million rural-to-
rural migrants in 1995 up from 2 million in 1988.^v An additional 9.8 million rural
workers in 1995 commuted to other villages, up from 3 million in 1988. The 22.7 million
workers who found non-agricultural employment through rural-to-rural labor movement
(12.9 plus 9.8) make China’s development unprecedented. We are unaware of a
development experience in any other country where the rural sector has offered industrial
jobs to such a large group of mobile workers.

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