INDUSTRIAL UPGRADE, EMPLOYMENT SHOCK, AND LAND CENTRALIZATION IN CHINA

After 30 years of agricultural reform started in 1978, peasant workers in China are experiencing new changes in their employment, land security, and income inequalities. This article theoretically investigates the relationships among industrial upgrading, mid-aged peasant nonfarm employment, and land conversion systems. We prove that China's efforts to upgrade its industries generate a negative employment shock on mid-aged peasant workers, forcing some of them to return to their home villages. The current lump-sum land acquisition system, however, will neither help peasant workers deal with the adverse employment shock nor promote land centralization for industrial and urban uses. On the contrary, land cooperation, an emerging land centralization system, will help peasant workers mitigate the adverse employment shock and centralize rural land for nonagricultural purposes. (JEL Q15, J43)