HighlightsRising real wages induced substitution of labor by machines in Chinese agriculture.An expansion of machine services by providers contributed to mechanization.Active land rental market enabled some farmers to increase their operational size.Relatively educated farmers tended to reduce their operational size.Scale economies are arising with mechanization and active land rental markets.

This article aims to investigate major factors that led to the observed pace of mechanization and the substitution between labor and machines in rural China. We used commodity-wise province-level panel data for more than a quarter of a century from 1984 to 2012. The analysis demonstrated a dramatic increase in real agricultural wages in recent years, especially after 2003, in contrast to a relatively stable real machine price. The relative price of machines against agricultural labor has declined in an accelerating way, which contributed to the observed rapid introduction of machines. The elasticity of substitution between labor and machines was large in some commodities, which contributed to a fast substitution of labor by machines.JEL classifications: J31, Q16

This paper examines dynamic patterns of land use, capital investments and wages in agriculture using farm panel data from Indonesia. The empirical analysis shows that with an increase in real wages that prevailed in both agricultural and non-agricultural sectors in rural areas, relatively larger farmers increased the size of operational farm land by renting in land as well as used more hired-in machines through machine rental and/or service providers, which induces the substitution of labor by machines.Machines and land are complementary and, consistently, the inverse farm size -productivity relationship tends to be reversed among relatively large holders. The results support growing (diminishing) advantage of large (small) farms in the presence of rapidly rising real wages and have food security policy implications to many Asian countries where real wages are rapidly rising and small farms are predominant.

Z-score is used as a measure of health and nutritional status in early childhood. Based on a comparison of siblings, the empirical analysis shows that improving children’s health significantly lowers the age when they start school, increases grade attainment, decreases grade repetition, and improves learning performance in the early stage of schooling. However, the observed effect diminishes as a child ages, which implies that (i) height at ages earlier than three better explains subsequent schooling outcomes and/or (ii) the role of health capital changes from one schooling stage to another.

The International Food Policy Research Institute (IFPRI) was established in 1975 to identify and analyze national and international strategies and policies for meeting the food needs of the developing world on a sustainable basis, with particular emphasis on low-income countries and on the poorer groups in those countries. IFPRI is a member of the CGIAR Consortium.