The Determinants of Employment Mode in Chinese Rural Labor

Based on a household survey of Anhui Province's Fuyang County in China, this paper investigates the determinants of employment, checks the effect of human capital on income and seeks to identify the main determinants of the off-farm participation trends in rural areas with high population densities. Econometric models were constructed to evaluate the determinants and effects of human capital on circular migration, local wage employment and self-employment. The results obtained from the model demonstrate that education has no positive effect on circular migration of rural labor. However, it was shown that education has a significant effect on rural labor with high wages and steady jobs. Rural laborers always obtain off-farm jobs from family members, relatives or friends rather than on their own, demonstrating the rural labor market is not mature. It is not likely farmers that own only their own labor can get steady income in urban areas by circular migration. Compared to other factors, investment in skill training is presently low so the final solution is to increase skill training in rural areas.JEL Classification: J23, J24, R23