2016
DOI: 10.1111/agec.12231
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Rising wages, mechanization, and the substitution between capital and labor: evidence from small scale farm system in China

Abstract: 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 acceler… Show more

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Cited by 122 publications
(111 citation statements)
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“…On the other hand, the stochastic frontier model is proposed by Aigner, Lovell, and Schmidt () and Meeusen and Van den Broeck (), and has been widely used by many scholars (e.g., Jin et al ; Wang, Yamauchi, and Huang ; Yang et al ). A classic stochastic frontier model has the form: yit=f();bold-italicXbold-italicitβ+bold-italicτT+νituit where f ( X it ; β ) measures the production frontier, T vectors a group of year dummy variables, and TE it = exp(− u it ) accounts for technical efficiency.…”
Section: Methodsmentioning
confidence: 99%
“…On the other hand, the stochastic frontier model is proposed by Aigner, Lovell, and Schmidt () and Meeusen and Van den Broeck (), and has been widely used by many scholars (e.g., Jin et al ; Wang, Yamauchi, and Huang ; Yang et al ). A classic stochastic frontier model has the form: yit=f();bold-italicXbold-italicitβ+bold-italicτT+νituit where f ( X it ; β ) measures the production frontier, T vectors a group of year dummy variables, and TE it = exp(− u it ) accounts for technical efficiency.…”
Section: Methodsmentioning
confidence: 99%
“…As more households began to work full-time off the farm, they also began to rent out their land (Gao et al 2012). Those who stayed are the ones renting this land, which is behind a steady increase in farm size and increasing pressure to mechanise Huang and Ding 2016;Wang et al 2016). …”
Section: Changes In Agricultural Structure and Rural Employmentmentioning
confidence: 99%
“…In terms of fixed assets, farmer investments in irrigation (Wang et al 2005) and agricultural machinery (Wang et al 2016) have steadily risen over time. In terms of variable inputs, the use of chemical fertilisers and pesticides has increased dramatically since 1978.…”
Section: Investing In Agriculturementioning
confidence: 99%
“…Some believed that although farmers can continue to work on their own land, but with the improvements permitted by mechanized farming, the requirement for human labor would be limited [66]. National statistics show that both the area of cultivated land and the area of land harvested by machines increased by four percent and nine percent annually, respectively, from 1990 to 2012 [67].…”
Section: Impact Assessment Of the Lufs Under The Three Scenariosmentioning
confidence: 99%