Does rural-to-urban migration reduce grain production? evidence from China

Abstract

We assess the effect of rural-to-urban migration (RUM) on grain production based on the unprecedented scale of RUM and the bumper harvest phenomenon in China. Results reveal that RUM may increase grain production; this effect is inconsistent with the “lost-labor effect.” Our mechanism analysis addresses the doubt that RUM promotes agricultural total factor productivity. Moving beyond traditional household-level factor substitution, we are the first to identify firm entry as a novel macro-channel explaining the positive effect of RUM on grain production. Concurrently, we confirm that mechanization and intermediate inputs synergistically elevate regional agricultural total factor productivity. Our welfare analysis reveals that RUM does not affect average rural income but does increase average rural consumption. Moreover, RUM positively affects agricultural growth. This study explains the growth of grain production under RUM.