The continued transfer of agricultural labor into the industrial sector is crucial to China's transformation into an industrial economy. We argue in this paper that rural industry offers an alternative to urban industry for receiving agricultural labor from areas without off-farm employment opportunities. Characteristics of rural industry differ from their urban counterparts. These characteristics may serve to shape the growth in employment for incoming workers in rural areas, provide opportunities for certain types of workers, and affect the impacts these workers have on the local economy. In this paper we examine the features of China's rural-to-rural labor movement and the villages where these workers are employed. Using a nationally representative sample of 215 villages, we show that the growth in rural-to-rural labor movement between 1988 and 1995 has been much faster than in rural-to-urban movement or in local off-farm employment. The rapid growth in rural-to-rural commuting and migration has not negatively affected off-farm income earning opportunities for workers living in the receiving villages. Rural-to-rural labor movement also has many positive effects. Labor movement into rural villages provides opportunities for workers generally underrepresented in other parts of the off-farm labor market, appears to dampen upward pressure on wages that allows rural industry to maintain labor intensive practices, and promotes national economic integration.

Comprises 12 papers which explore the extent and nature of rural-urban migration in China during the 1980s and 1990s. Examines the characteristics of migrants at the individual, household and community levels and investigates the organizational aspect of labour flows. Analyses the effects of migration on rural and urban areas. Includes a chapter on the development of labour migration from Mexico to the USA.

The authors find that reform of the Hukou system has the most significant impact on aggregate economic activity, as well as income distribution. Whereas the land market reform primarily benefits the agricultural households, this reform's primary beneficiaries are the rural households currently sending temporary migrants to the city. By reducing the implicit tax on temporary migrants, Hukou reform boosts their welfare and contributes to increased rural-urban migration. The combined effect of both factor market reforms is to reduce the urban-rural income ratio dramatically, from 2.59 in 2007 under the authors' baseline scenario to 2.27. When viewed as a combined policy package, along with WTO accession, rather than increasing inequality in China, the combined impact of product and factor market reforms significantly reduces rural-urban income inequality. This is an important outcome in an economy currently experiencing historic levels of rural-urban inequality"--Abstract.

A study of how China’s changing economy may leave its rural communities in the dust and launch a political and economic disaster. As the glittering skyline in Shanghai seemingly attests, China has quickly transformed itself from a place of stark poverty into a modern, urban, technologically savvy economic powerhouse. But as Scott Rozelle and Natalie Hell show in Invisible China, the truth is much more complicated and might be a serious cause for concern. China’s growth has relied heavily on unskilled labor. Most of the workers who have fueled the country’s rise come from rural villages and have never been to high school. While this national growth strategy has been effective for three decades, the unskilled wage rate is finally rising, inducing companies inside China to automate at an unprecedented rate and triggering an exodus of companies seeking cheaper labor in other countries. Ten years ago, almost every product for sale in an American Walmart was made in China. Today, that is no longer the case. With the changing demand for labor, China seems to have no good back-up plan. For all of its investment in physical infrastructure, for decades China failed to invest enough in its people. Recent progress may come too late. Drawing on extensive surveys on the ground in China, Rozelle and Hell reveal that while China may be the second-largest economy in the world, its labor force has one of the lowest levels of education of any comparable country. Over half of China’s population—as well as a vast majority of its children—are from rural areas. Their low levels of basic education may leave many unable to find work in the formal workplace as China’s economy changes and manufacturing jobs move elsewhere. In Invisible China, Rozelle and Hell speak not only to an urgent humanitarian concern but also a potential economic crisis that could upend economies and foreign relations around the globe. If too many are left structurally unemployable, the implications both inside and outside of China could be serious. Understanding the situation in China today is essential if we are to avoid a potential crisis of international proportions. This book is an urgent and timely call to action that should be read by economists, policymakers, the business community, and general readers alike. Praise for Invisible China “Stunningly researched.” —TheEconomist, Best Books of the Year (UK) “Invisible China sounds a wake-up call.” —The Strategist “Not to be missed.” —Times Literary Supplement (UK) “[Invisible China] provides an extensive coverage of problems for China in the sphere of human capital development . . . the book is rich in content and is not constrained only to China, but provides important parallels with past and present developments in other countries.” —Journal of Chinese Political Science

China's remarkable economic transition and capacity for dynamic growth has stunned the world. Throughout the period of economic reform, China has been moving towards the creation of a labour market. The scale of this transformation is unprecedented. New economic incentives, vast labour migration, draconian retrenchment of state workers, and sharply rising wage inequality are all characteristic of this unique transition. Drawing on more than a decade of survey-based research, the authors systematically document and analyse this important transformation. They use economic and sociological theory, institutional analysis and political economy to fully explain the causes, pressures, obstacles and consequences of the move towards a labour market in China. It is argued that much progress has been made towards the creation of a labour market but that the process is far from complete.