Increasing Wages, Factor Substitution, and Cropping Pattern Changes in China

This article analyzed the influence of increasing wages on cropping patterns from theoretical and empirical perspectives. The results showed that the increasing labor cost provided a significant incentive to adjust the grain cropping pattern, which increased the production of the three major cereal...

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Bibliographic Details
Published in:China & world economy 2023-09, Vol.31 (5), p.190-214
Main Authors: Yan, Zhoufu, Zhang, Shurui, Wu, Fangwei, Gong, Binlei
Format: Article
Language:English
Subjects:
Cereals
cropping pattern changes
Crops
factor substitution
Grain
increasing wages
Labor costs
production transformation
Vegetables
Wages & salaries
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Summary:This article analyzed the influence of increasing wages on cropping patterns from theoretical and empirical perspectives. The results showed that the increasing labor cost provided a significant incentive to adjust the grain cropping pattern, which increased the production of the three major cereal grains but reduced the production of other grain crops. Increasing wages had a significant negative impact on cash crops. More labor‐intensive cash crops experienced a larger negative impact in the context of increasing wages. The increase in labor costs also had a negative impact on the proportion of vegetables produced, which was more evident in northern China. A further mechanism test indicated that factor substitution was a significant reason for cropping pattern changes; this illustrated the substitution of labor by machinery not only between grain crops and cash crops but also among different cash crops.
ISSN:1671-2234
1749-124X
DOI:10.1111/cwe.12506