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

At first glance, these problems appear to be formidable obstacles to China’s
continued economic transformation. But, fortunately, rural workers need not move into
urban areas to find off farm employment in China. A feature unique to China’s
development, when compared to the development experiences of other countries, is the
share of industrial output produced by rural industry. Rural industrial output value grew
at nearly 35 percent per year between 1980 and 1993 and contributed significantly to
China’s miracle growth (ZGTJNJ, 1995). While scholars inside and outside China have
studied many different aspects of rural industrial development, few have examined the
record of, or the potential for, rural workers to move into other rural areas or the impact
that incoming workers have on the local economy.

In this paper, we provide one of the first efforts to examine rural-to-rural labor
movement in China. Specifically, we address three objectives. First, we give estimates
of the size and growth of rural-to-rural labor movement. Second, we identify the types of
workers participating in rural-to-rural commuting and migration and the types of rural
industries employing workers from other villages. Finally, we take an initial look into the
nature of demand for incoming workers and explore the impact that the incoming
workers have on off-farm employment and wages of workers in the receiving villages.
Understanding the impact incoming workers have on receiving villages will help us
gauge how much resistance local leaders in prosperous rural areas may put up in response
to increasing numbers of incoming workers in the future.

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