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How Off-farm Employment Affects Technical Efficiency of China’s Farms: The Case of Jiangsu
Journal Article

Published By

China & World Economy, Vol. 3

2016

Abstract: Using three-wave survey data for four villages of Jiangsu Province in China, the present paper examines whether and to what extent off-farm employment affects the technical efficiency of agricultural production. The level of technical efficiency is measured using a stochastic frontier production function approach. Based on estimation results from instrumental variable panel quantile regressions we fi nd that there is a positive signifi cant effect of off-farm employment on the level of farm technical effi ciency. We also fi nd that fragmentation of farmland is a barrier to the improvement of technical effi ciency. In addition, we fi nd a downward trend in the level of agricultural technical efficiency among our sample. Therefore, the Chinese Government should stimulate agricultural mechanization and the development of farming techniques to improve technical effi ciency in the context of increasing off-farm employment.

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