Place-based rural development programs and the labor allocation of farm households
Journal
China Agricultural Economic Review
Journal Volume
16
Journal Issue
4
Start Page
683
End Page
711
ISSN
1756-137X
Date Issued
2024-05-28
Author(s)
Abstract
Purpose: Rural development programs are widely used policy instruments mitigating rural-urban economic disparities. Yet, little research has examined their effect on rural labor. This study fills this knowledge gap by quantifying the causal impact of such programs on the labor allocation of farm households in Taiwan. Design/methodology/approach: A theoretical framework based on the agricultural household model is constructed to guide the empirical specification. A unique dataset compiles administrative data on the program’s subsidies with farm household surveys across seven years. To cope with endogeneity bias, an instrumental variables model is applied. The eligibility rule for a township to participate in the program is used as the instrument. Findings: We find that the program increases the labor supply of farm household members. These effects are more pronounced for off-farm work, particularly non-heads of farm households. The program’s subsidies supporting culture and promotion-related activities have larger effects. Finally, females benefited more from the program. Originality/value: We focus on farm households since this group is the target of place-based rural development programs. In addition, we identify the causal impact of place-based development programs on rural labor. Finally, this study is relevant to the literature on intra-household models by demonstrating that place-based rural development programs can affect the labor supply of farm household members.
Subjects
Administrative data
Farm households
Labor allocation
Place-based rural development programs
Rural development
Publisher
Emerald
Type
journal article