Working Paper: CEPR ID: DP16614
Authors: Debin Ma; Kaixiang Peng
Abstract: China’s (or East Asian) highly crop-based agriculture generates high seasonality in demand for labor across the year, leading to the rise of agricultural and handicraft side-employment. In contrast to the “involution” thesis which posits a Malthusian trap with diminishing return in Chinese agriculture dictated by deteriorating land-labor ratio, this paper presents stylized empirical facts from 19-20th century Chinese (and Japanese) agriculture and theoretical models to demonstrate that this labor relocation across the seasons contributes to a Boserupian type of growth. It leads to rising commercialization and population density, but not necessarily urbanization, rising productivity and structural change. Ultimately, industrialization and the expansion of markets that occurred outside agriculture pulled China (and Japan) out of the “involution” to embark on modernization.
Keywords: Chinese agriculture; involution; Malthusian; Boserupian
JEL Codes: N55; O13; O44; O53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Labor relocation across seasons (J62) | Rising commercialization (F69) |
| Labor relocation across seasons (J62) | Population density (J11) |
| High seasonality in demand for labor (J23) | Labor productivity (O49) |
| High seasonality in demand for labor (J23) | Structural change in the economy (L16) |
| Expansion of markets outside agriculture (F19) | Industrialization (O14) |
| Industrialization (O14) | Modernization in China and Japan (O14) |