The effect of off‐farm employment on the decisions of households to rent out and rent in cultivated land in China

Abstract

PurposeDeveloping nations need good cultivated land rental markets to foster rational resource use and to enhance productivity and equity. Can cultivated land rental markets emerge in the face of rapidly developing off‐farm labor markets? The purpose of this paper is to measure the correlation between the emergence of off‐farm employment and cultivated land rental in China.Design/methodology/approachBased on a panel data from 2000 and 2008, the authors constructed econometric models to identify the impact of off‐farm employment on the decisions of households to rent out and rent in cultivated land.FindingsThis paper finds that the emergence of off‐farm employment has significant and positive impacts on stimulating household to rent out cultivated land. The effect is less prominent for renting‐in decisions.Originality/valueThe paper empirically estimates the impacts of off‐farm employment on cultivated land rent markets based on a unique panel data set from a national representative sample.