The role of health and education in household labor allocation and returns: Evidence from rural China

Jared E Gars, Purdue University

Abstract

This thesis describes the links between farmers’ human capital and their off-farm activities in rural China. Previous research on the link between human capital and off-farm employment has focused primarily on education; this thesis uses two rounds of the China Health and Nutrition Survey to address the role of self-reported and objective health measures as well. The impacts of education on wages, labor supply, and off-farm participation have been measured repeatedly, especially in China. However, very little attention has been paid to the role of health in the allocation of labor. I seek to fill this gap by measuring the relationship between farmers’ health and their off-farm employment for male and female labor in rural China. By separating the decision to participate from the intensity of labor supply, and estimating wage responses to education and health, I shed light on the mechanisms through which human capital affects labor supply decisions. The results suggest that education plays an important role in the determination of wages and participation in off-farm wage employment for rural Chinese workers. Individual health, measured as self reported health status, is closely related to the offered wage as well as the decision to participate in the off-farm labor market. Finally, the ability to find employment at the village level is dependent on transportation infrastructure and the presence of local enterprises.

Degree

M.S.

Advisors

Shively, Purdue University.

Subject Area

Agricultural economics

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