The Declining Share of Agricultural Employment in the People's Republic of China: How Fast?

24 Pages Posted: 3 Feb 2015

See all articles by Jesus Felipe

Jesus Felipe

De La Salle University

Connie Bayudan-Dacuycuy

Ateneo de Manila University

Matteo Lanzafame

University of Messina - Department of Economics

Date Written: November 2014

Abstract

From 1962 to 2013, the People’s Republic of China’s (PRC’s) agricultural employment share declined from 82% to 31%. The transfer of workers out of low-productivity agriculture is a fundamental pillar of the PRC’s aspirations to progress and eventually become a high-income economy. We hypothesize that the drivers of this decline have been the increase in income per capita, industrial value added, foreign direct investment, and domestic credit. We use an Autoregressive Distributed Lag Model to test the strong exogeneity of the regressors so that we can use it for forecasting. Results indicate that the share of employment in agriculture in the PRC will decline to about 24% by 2020, the end of the 13th Five-Year Plan (2016-2020). We also estimate that the PRC’s employment share will reach 5%, the share observed in today’s rich economies, by 2042-2048.

Keywords: agricultural employment, People’s Republic of China, structural transformation

JEL Classification: O13, O53, Q10

Suggested Citation

Felipe, Jesus and Bayudan-Dacuycuy, Connie and Lanzafame, Matteo, The Declining Share of Agricultural Employment in the People's Republic of China: How Fast? (November 2014). Asian Development Bank Economics Working Paper Series No. 419, Available at SSRN: https://ssrn.com/abstract=2558896 or http://dx.doi.org/10.2139/ssrn.2558896

Jesus Felipe (Contact Author)

De La Salle University ( email )

2401 Taft Avenue
Manila, Metro Manila 1004
Philippines

Connie Bayudan-Dacuycuy

Ateneo de Manila University ( email )

Katipunan Ave
Quezon City, Manila 1108
Philippines

Matteo Lanzafame

University of Messina - Department of Economics ( email )

Via T. Cannizzaro 278
Messina, 98122
Italy

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