Seminar Vol. 191

Title: Selective Migration and Agricultural Productivity Gap: Evidence from China

Speaker: Xiaodong Zhu, University of Toronto

Time: October 25th, 2019      13:30-15:00

Venue: Conference Room 106B, IESR, Zhonghui Building (College of Economics)

About the speaker:

Xiaodong Zhu received his Ph.D in Economics from the University of Chicago in 1991. He is currently a Professor at the Department of Economics, University of Toronto. His research fields include macroeconomics, economic development, and Chinese Economy. He has published many papers in the American Economic Review, Journal of Economic Perspectives, Journal of Monetary Economics, and so on.

Abstract:

It has been well documented that there are large labour productivity gaps between agricultural and non-agricultral sectors in developing countries. These gaps exist even after controlling for sector difference in observable worker characteristics. Current literature suggests two potential explanations for the gaps: (1) sector differences in unobservable characteristics and sorting, and (2) barriers to switching sectors or migration. Using a 10-year panel dataset of 20,000 households from China and a structural model of sector selection by workers, we empirically estimate the barriers by controlling for both observable and unobservable worker characteristics and sorting. In addition, we make use of the county-by-county roll-out of the New Rural Pension Scheme as an instrument that only affects the migration costs but not wages to identify the impact of migration barriers on agricultural productivity gap. We find significant barriers in China and evidence that they are related to China’s hukou system.