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Decline of Rural Chinese Workers

It’s interesting to see how China has continued to increase grain output year after year even though farmland has been steadily lost to urbanization and many rural workers have opted to leave their jobs in order to move away to new, urban places. What are these workers thinking? Why are they moving away to other jobs when they know there is such a high demand for grain? One explanation for this can be described by a cascade similar to those we have seen in class.

On a basic level, each rural worker can choose between two states: remain working on a farm or move to a bigger city. Like in class, each worker can view a signal. This signal is information they can gather on their own. For instance, maybe you can see that new farming machines are being purchased that will decrease the demand for your position (i.e. tractors replacing human plowers). Another example could be that you know of a higher paying job in the city that you can get. Whatever it is, you have some sort of signal that urges you to either stay or go.

Additionally, like in class, you can observe the actions of other workers. You don’t know whether or not other workers have any better information than you, but you may be thinking something along the lines of: “What did everyone else do? Move to the city? I guess I should too”.

Because of this cascade, there has been a decrease in rural population from 790 million to 710 million over the last 30 years. In addition, the cost of labor is rising which has made the option of switching to advanced farming machinery even more appealing (thus reducing the demand for workers). As more and more workers leave for the city, China’s food security will continue to become less certain. An official from the Ministry of Agriculture was quoted as saying: “The core issue is, who will plant for us and ensure food security in future following urbanization and industrialization?”. With the cascade of workers already so set, it seems unlikely that anyone will want to move back to the farming lifestyle.

http://www.reuters.com/article/2012/11/13/us-china-agriculture-mechanisation-idUSBRE8AC15P20121113

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