The Rise of Self-Employment in Rural China: Development or Distress?

Posted: 22 Mar 2006

See all articles by Sandeep Mohapatra

Sandeep Mohapatra

University of Alberta - Faculty of Agriculture, Forestry & Home Economics - Department of Rural Economy

Scott Rozelle

University of California, Davis - Department of Agricultural and Resource Economics

Rachael E. Goodhue

University of California, Davis - Department of Agricultural and Resource Economics

Abstract

This paper evaluates the role of self-employment in China's rural economy, while paying attention to whether the rise of self-employment promotes entrepreneurship and is a sign of development, or whether it is a stopover for disadvantaged workers and a sign of distress. Using data on 20-year labor market histories of a nationally representative sample of individuals we provide descriptive evidence that self-employment in rural China, unlike in other places, is a sign of development. Econometric evidence from a random-effects Probit model and a continuous-time Markov model shows also that self-employment in rural China shares many features of a productive small-business sector.

Keywords: Asia, China, Self-employment, Entrepreneurship, Development, Markov

JEL Classification: J24

Suggested Citation

Mohapatra, Sandeep and Rozelle, Scott and Goodhue, Rachael E., The Rise of Self-Employment in Rural China: Development or Distress?. World Development, Forthcoming, Available at SSRN: https://ssrn.com/abstract=890806

Sandeep Mohapatra (Contact Author)

University of Alberta - Faculty of Agriculture, Forestry & Home Economics - Department of Rural Economy ( email )

Edmonton, Alberta
Canada

Scott Rozelle

University of California, Davis - Department of Agricultural and Resource Economics ( email )

One Shields Avenue
Davis, CA 95616
United States
530-752-9897 (Phone)

Rachael E. Goodhue

University of California, Davis - Department of Agricultural and Resource Economics ( email )

One Shields Avenue
Davis, CA 95616
United States
916-754-7812 (Phone)
530-752-5614 (Fax)

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