Does a higher minimum wage accelerate labour division in agricultural production? Evidence from the main rice-planting area in China. Issue 1 (31st December 2022)

• Record Type: Journal Article
• Authors: Guo, Lili; Duan, Xiaoyu; Li, Houjian; Yang, Wanjiang; Ren, Yanjun; Guo, Yangli
• Is Part Of: Ekonomska istraživanja. Volume 35:Issue 1(2022)
• Page Start: 2984
• Page End: 3010
• Publication Date: 2022-12-31
• Subjects: production outsourcing -- minimum wage -- control function (C.F.) approach -- China; D1 -- D2 -- D24; Economics -- Research -- Periodicals; Economics -- Research; Electronic journals; 330.072
• DOI: 10.1080/1331677X.2021.1985573
• Languages: English
• ISSNs: 1331-677X

Abstract

Abstract: Agricultural production outsourcing, a new means of agricultural production, can optimise the allocation of resources, reduce agricultural production costs, and improve agricultural productivity. However, farmers' outsourcing behaviours are strongly interfered with by many factors such as economics, technology and institutions. Using a farmer-level data set from 2014 to 2018 in China, we examine the effects of the minimum wage increase on rice farmers' production outsourcing behaviours. Our study relies on a Logit regression framework and uses the control function (C.F.) approach to address potential endogeneity concerns. Results show that the minimum wage increase significantly reduces the probability of farmers conducting production outsourcing. We also examine the heterogeneous effects of the minimum wage increase, and find that compared with other outsourcing services, the adverse effects on harvesting outsourcing are the strongest; the negative effects on production outsourcing are stronger for rice farmers with higher education. Our results provide new insights into understanding how labour regulation affects labour division in agricultural production.