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



Conclusion

Scholars and policymakers concerned about low rural incomes and the fostering
of institutions that will assist China’s transformation into an industrial economy should
be interested in the rise in rural-to-rural labor movement. Given increasing urban
unemployment and the challenging reforms that remain in the cities, it is unlikely that
China’s urban areas will become more friendly or fruitful employment environments in
the near future. Rural areas with industry and service activities may be one of the most
promising sources of off-farm employment growth, a fascinating and unprecedented
trend in recent history. If rural industry remains profitable and policy barriers against
hiring incoming workers are not re-erected, rising demand for labor in China’s rural
enterprises may increasingly draw from the immense agricultural labor force in outlying
rural areas. An increasingly integrated rural-to-rural labor market also could be a key to
keeping rural industry competitive during times when profits are down.

One of the main findings of this paper is that rural-to-rural labor movement is the
fastest growing component of the rural off-farm employment and has expanded the
occupational choices rural residents face and has provided new opportunities for less-well
endowed workers to join the off-farm labor force. Over the period 1988 to 1995, self-
employment grew at an annual rate of 14 percent and allows older, more experienced and
usually male workers to increase their incomes. Local employment in village enterprises
grew at only 6 percent and these jobs go mostly to young men with some education.
Rural-to-urban labor movement grew by 9 percent annually, but is also primarily a male
phenomenon. Rural-to-rural labor movement, however, grew at an annual rate of 27
percent over the period and has given opportunities to young women and workers with

26



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