The effect of rising wages of agricultural labor on pesticide application in China

Abstract

This paper focuses on the issue of how rising wages of agricultural labor affect pesticide application. Using survey data of 3399 rice farmers from 12 provinces in southern China between 2018 and 2019, this paper estimates the effect of wages of agricultural labor on pesticide application by employing the control function (CF) approach. The results suggest that a 10% rise in labor wages corresponds to a 6.88% increase in pesticide dosage and a 4.46% increase in pesticide expenses. Furthermore, this paper analyzes the heterogeneous effects of rising labor wages on pesticide dosage. The results reveal that the positive effect of labor wages on pesticide dosage is weaker for farmers who receive rice subsidies and have cooperative membership but it is stronger for farmers with more rice cultivation experience and those who use more chemical fertilizers. According to these findings, this study proposes policy implications for reducing pesticide application in terms of developing agricultural technologies, encouraging farmers to join cooperatives, and calling on governments to increase crop subsidies.