Impact of non-agricultural employment on industrial structural upgrading -Based on the household consumption perspective.

Abstract

China's rural revitalization strategy has expanded non-agricultural employment opportunities for rural residents. This has directly raised farmers' incomes and household expenditures, which in turn has contributed to the upgrading of industrial structure. Using provincial data for 2012-2021, our study investigates how this employment transition affects industrial development. The effect of rural residents' consumption expenditures on this relationship is also explored through a linkage model to help measure the extent of the impact. This study further explores the regional differences in this effect and its robustness. The findings suggest that non-farm employment significantly contributes to industrial structural upgrading. However, this effect is not consistent across regions. Moreover, rural residents' consumption plays a pivotal role in this relationship. Governments should therefore encourage more non-farm jobs, stimulate domestic demand and use rural consumption as a key growth catalyst, especially after the demographic dividend disappears. It is also important to take into account regional nuances in policy formulation and make adjustments to cater for these differences to prevent any potential imbalances.