The Effect of Off-Farm Employment on Agricultural Production Efficiency: Micro Evidence in China

With ensuring food security becoming a priority for the Chinese government, the prevalence of off-farm employment (OE) may cast a shadow on agricultural productivity. Based on the data of the China Family Panel Studies in 2018, the Tobit model and threshold effect model have been applied to investigate the impact of off-farm employment on agricultural productivity efficiency (APE), measured by data envelopment analysis (DEA). The result has shown that: (1) OE contributes to a low level of APE. (2) Both self-employed off-farm employment (SOE) and wage-based off-farm employment (WOE) result in lower APE levels when endogenous issues are addressed. However, SOE had a greater negative impact on APE than WOE. (3) There exists a threshold for OE associated with a lower level of APE, indicating that the negative effect of OE on APE disappears when the degree of OE is high enough, SOE has a lower threshold than WOE. The study findings have implications for improving agricultural production efficiency in the context of large-scale off-farm employment of Chinese farmers.

Automated summary

This study examines the impact of off-farm employment on agricultural productivity efficiency in China using data from the China Family Panel Studies. The findings indicate that off-farm employment lowers agricultural productivity efficiency, with self-employed off-farm employment having a greater negative effect. The study also identifies a threshold level of off-farm employment where the negative effect disappears.