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Abstract

This study employs panel data to analyze the economic factors that drive rural-urban migration and agricultural labor supply within China. The results indicate that higher wages in urban areas, especially in the construction sector, was associated with rural-urban migration and a decline in the agricultural labor supply. The rural-urban wage differential in construction reflects the housing boom in cities set off by rapid urbanization and government policies. Most importantly, our findings raise concerns about the negative impact of rural-urban migration on agriculture in China. Policies that impact labor supply, especially in times of rapid urban development and low diffusion of agricultural technology, are critical to Chinese economic development and stability.

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