Employment New labor market Higher education in Ch

eScholarshipprovidesopenaccess,scholarlypublishingservicestotheUniversityofCaliforniaanddeliversadynamicresearchplatformtoscholarsworldwide.DepartmentofAgriculturalandResourceEconomics,UCDUCDavisTitle:Employment,EmergingLaborMarkets,andtheRoleofEducationinRuralChinaAuthor:Zhang,Linxiu,ChineseAcademyofSciencesHuang,Jikun,ChineseAcademyofSciencesRozelle,ScottD.,UniversityofCalifornia,DavisPublicationDate:04-01-2002Series:AgricultureandResourceEconomicsWorkingPapersPublicationInfo:AgricultureandResourceEconomicsWorkingPapers,DepartmentofAgriculturalandResourceEconomics,UCD,UCDavisPermalink::returntoeducation,laborparticipantAbstract:TheoverallgoalofthispaperistocontributetotheongoingassessmentofChina'srurallabormarkets.Tomeetthisgoal,wehavethreespecificobjectives.First,wewillprovideanupdateofthetrendsinoff-farmlaborparticipationandwagesofthesamplehouseholdsandexaminehowlabormarketoutcomeshavechangedforthosewithdifferentlevelsofeducation.Second,wewillthenseektoexamineifeducationindifferenttimeperiods-thelate1980s,theearly1990sandthemid1990s--canbeassociatedwithincreasingaccesstooff-farmjobs.Finally,wewillexaminehowreturnstoeducationhavechangedduringthecourseofthereformera.Inshort,ourhypothesesarethatiflabormarketsareincreasinglyrewardingthosewitha.)bettereducationjobaccess;b.)easierentry;andc.)higherwages,suchoutcomeswillcountasevidencethatlabormarketsareimproving.Boththedescriptivedataandthemultivariateanalysisrobustlysupportthefindingsthatbetweenthelate1980sandthemid-1990s,labormarketshaveimprovedinthesensethatruralworkershavebeenincreasinglyrewardedfortheireducation.DepartmentofAgriculturalandResourceEconomicsUniversityofCaliforniaDavisEmployment,EmergingLaborMarkets,andtheRoleofEducationinRuralChinabyLinxiuZhang,JikunHuang,andScottRozelleWorkingPaperNo.02-001April,2002Copyright@2002LinxiuZhang,JikunHuang,andandScottRozelleAllRightsReserved.ReadersMayMakeVerbatimCopiesOfThisDocumentForNon-CommercialPurposesByAnyMeans,ProvidedThatThisCopyrightNoticeAppearsOnAllSuchCopies.CaliforniaAgriculturalExperimentStationGianniniFoundationforAgriculturalEconomics1April16,2002Employment,EmergingLaborMarkets,andtheRoleofEducationinRuralChinaLinxiuZhang,CenterforChineseAgriculturalPolicy,IGSNRR-CAS,BeijingJikunHuang,CenterforChineseAgriculturalPolicy,IGSNRR-CAS,BeijingScottRozelle,Dept.ofAgricultureandResourceEconomics,UniversityofCalifornia,DavisSubmittedtoChinaEconomicReviewWewouldliketothankthestaffmembersoftheCenterforChineseAgriculturalPolicy,studentsoftheLEADS21WinrockPh.D.ProgramandmembersofChinaRiceResearchInstitute(CAAS)fortimeandeffortspentincollectingthe1996data.Helpfulcommentswerereceivedduringthe2001AASandCERDIconferences,especiallythoseofTomRawski.AdditionalcommentswereprovidedbyAlandeBrauw,QiuqiongHuang,AlbertPark,andananonymousreferee.ThankstotheFordFoundation,Beijing,fortheirfinancialsupportofthisproject.2Employment,EmergingLaborMarkets,andtheRoleofEducationinRuralChinaAbstractTheoverallgoalofthispaperistocontributetotheongoingassessmentofChina’srurallabormarkets.Tomeetthisgoal,wehavethreespecificobjectives.First,wewillprovideanupdateofthetrendsinoff-farmlaborparticipationandwagesofthesamplehouseholdsandexaminehowlabormarketoutcomeshavechangedforthosewithdifferentlevelsofeducation.Second,wewillthenseektoexamineifeducationindifferenttimeperiods–thelate1980s,theearly1990sandthemid1990s--canbeassociatedwithincreasingaccesstooff-farmjobs.Finally,wewillexaminehowreturnstoeducationhavechangedduringthecourseofthereformera.Inshort,ourhypothesesarethatiflabormarketsareincreasinglyrewardingthosewitha.)bettereducationjobaccess;b.)easierentry;andc.)higherwages,suchoutcomeswillcountasevidencethatlabormarketsareimproving.Boththedescriptivedataandthemultivariateanalysisrobustlysupportthefindingsthatbetweenthelate1980sandthemid-1990s,labormarketshaveimprovedinthesensethatruralworkershavebeenincreasinglyrewardedfortheireducation.3Employment,EmergingLaborMarkets,andtheRoleofEducationinRuralChinaThemassiveflowoflaborintotheoff-farmsectorhasbroughtnewprosperitytomillionsofruralhouseholdsduringChina’seconomicreformera.Theproportionoftherurallaborforcethathasenteredthelaborforcerosefromaround22percentin1988to34percentin1995(Rozelleetal.,1999).By2000,nearly200millionpeople(orabout40percentoflaborers)heldoff-farmjobs.Theriseinwageearningsandincomefromself-employedactivitieshascreatedmostoftheincreaseinruralincomesinthelate1980sand1990s(Parrish,Zhe,andLi,1995;Rozelle,1995).Beyondbeingasourceofincomeforruralmigrants,labormarketsplayanevenmoreimportantroleinthedevelopmentprocess(Todaro,1976;Stark,1976).ForChinatodevelop,labormarketsmustoperateeffectivelyinordertohelpshiftalargepartofChina’spopulationfromruraltourban.Labormarketsalsofacilitatetheshiftoftheeconomyfromagriculturaltoindustrial.Hence,asChina’sleadersmakeeconomicdevelopmentpolicies,theyshouldbeinterestedinknowingiflabormarketshavebeenemerginginawaythatwillfacilitateChina’smodernizationambitions.Althoughthefocusofconsiderabler