Surplus Labor and Mobility in Hebei, China: An Evaluation of the Litu Bu Lixiang Approach.

The most fundamental economic reforms were introduced within the rural areas in China during the 1980s. The resulting greater efficiency in production, and the continued population growth have combined to result in a vast number of surplus laborers in rural areas. While concerned about the rural surplus labor problem, the Chinese government also determined to avoid mass rural-urban migration. In 1984, the Chinese Government promulgated a policy called litu bu lixiang (leave the land, but not the countryside). The basic idea is to absorb surplus labor through the retention of labor in the rural areas by creating non-agricultural opportunities. The purpose of this dissertation is to evaluate the impact of the litu bu lixiang policy. I conducted a field research in two counties--Li and Dingxing County--in Hebei, China in 1992. Multi-scale data--data on individual, household, township, and county levels--were collected. My analysis indicates that the people who shift from agriculture to non-agricultural sectors (litu people) have higher income than the people who still remain in agriculture. I also found that young, male, and more educated people are more likely to leave agriculture to pursue better opportunities. By creating non-agricultural opportunities in local areas, the litu bu lixiang program has successfully retained high-quality labor in rural areas where such workers can continue to contribute in agricultural production. This not only prevents the decline of agricultural production, but also ensures future rural development. For the households in my survey, seeking better economic returns was reported as the major reason for rural-urban migration. My results suggest that better opportunities are not necessarily in the cities; people would prefer to find non-agricultural job in the local areas, because moving to urban areas entails much higher costs, economically and psychologically, while not necessary resulting higher returns. The analysis of xiang level shows that the townships in Li County are more likely to have higher incomes than the townships in Dingxing County. The differences manifested that the local government plays an important role in initializing the litu bu lixiang program