The relationship between rural employment rate and rural development: An analysis based on a bivariate VAR model

Abstract

Rural development has been a traditional concern in China. With large rural populations, Communist Party of China focuses on solving the three agriculture-related problems. Currently, the transfer of rural population from country to city leads to an obvious reduction in employment in the primary sector. As a populous country, the agriculture is the foundation of China’s national economy. This paper investigates the relationship between the employment in the primary sector and the total output value index of farming, verifying the effect of labor factor. The econometric investigation based on the bivariate VAR model shows the employment in the primary industry has a dynamic change characteristic to total agricultural production. Further, the relationship changes from negative to positive.