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Abstract
This paper studies the effect of local off-farm employment and migration on rural
households’ technical efficiency of crop production using a five-year panel dataset from
more than 2,000 households in five Chinese provinces. While there is not much debate
about the positive contribution of migration and local off-farm employment to China’s
economy, there is an increasing concern about the potential negative effects of moving
labor away from agriculture on China’s future food security. This is a critical issue as
maintaining self-sufficiency in grain production will be critical for China to feed its
huge population in the future. Several papers have studied the impact of migration on
production and yield with mixed results. But the impact of migration on technical
efficiency is rarely studied. Methodologically, we incorporate the correlated randomeffects
approach into the standard stochastic production frontier model to control for
unobservable that are correlated with migration and off-farm employment decisions and
technical efficiency. The most consistent result that emerged from our econometric
analysis is that neither migration nor local off-farm employment has a negative effect on
the technical efficiency of grain production, which does not support the widespread
notion that vast-scale labor migration could negatively affect China’s future food security.