Agricultural productivity fluctuations and structural transformation—Evidence from rural China

Abstract

This study explores how short-term agricultural productivity fluctuations affect labor supply of Chinese rural households under the background of frequent extreme weather events. It reveals that extreme rainfall-induced declines in agricultural productivity lead to decreased agricultural employment and increased non-agricultural employment and migration. Additionally, there is a shift in workdays away from agriculture toward sectors such as manufacturing, construction, and transportation. The study estimates that labor reallocation can alleviate 32.56% of income losses caused by these productivity fluctuations. Overall, these findings underscore the vital role of labor reallocation in mitigating the economic impact of short-term agricultural productivity declines.