The study of rural employment population change on regional economic development can be divided into the following three models: One, with the implementation of the household contract responsibility system, the rural labor force has been greatly liberated, and the surplus labor force has been pouring into cities, which has not only promoted the continuous improvement of the family income of migrant workers, but also brought a lot of money to the rural areas of the labor export areas and stimulated the local consumption demand, thereby promoting the economic development in the region.(Que Chunping&Zhou Bifen,2018)Second, with the decrease of rural employment, especially in agriculture-based areas, the industrial structure has changed and adjusted, which has a certain impact on the economic development of the region. Xu Qinghua points out that the reduction of rural labor transfer not only promotes the optimization of agricultural production factors in the region, but also has a certain positive spatial spillover effect. It is worth noting that this positive spillover effect will also be different because of the different industrial structure of the county(Xu Qinghua,&Zhang Guangsheng,2018); Secondly, the main problem of "agriculture, rural areas and rural people" is that too many agricultural population occupy less resource allocation. Therefore, the core method to solve "agriculture, rural areas and rural people" is that urbanization, marketization, industrialization and agricultural and rural modernization promote each other's development(Xi Jinping,2001). It is of great significance to explore the role of citizenization of rural employment population(Luo Yuanqing,&LIU Jun&HU Min,2019). Third, some foreign scholars believe that there is a strong coupling mechanism between the loss of rural population in poor areas and the economic development of the region, that is, poverty leads to continuous population spillover, which in turn aggravates the imbalance of economic development in the region and falls into a situation similar to the "poverty trap"(Jiao HONG&Jiang Bingyu,2005). For example, a large number of left-behind children, the elderly, urban diseases and many other negative effects have indirectly hindered economic development in the region. The above three models have the opposite conclusion on how the rural employment population shrinks and how the regional economy develops. The former two think that the rural agricultural population transfer is not only beneficial to the development of rural areas, but also to the promotion of regional urbanization and regional economic development ; the latter view holds that the shrinkage of rural employment population will also bring negative effects on regional economic development.
Whether H province as a major agricultural province has the possibility of hindering the regional economic development of H province due to the population shrinkage of rural employment. According to the current development status of H province, the outflow population of rural employment is mainly concentrated in some underdeveloped urban areas, thus forming the phenomenon of urbanization depression and hollowing out of rural settlements simultaneously. The internal environmental factors that cause this phenomenon include: the low income level in underdeveloped areas, the relatively weak supply of medical services and the relative lack of cultural life, resulting in the intensification of the loss of rural employment population. The external environmental factors are: the siphon effect of labor resources in the prefecture-level cities of the developed neighboring province H province leads to the loss of rural employment and accelerates the development of local economy. In view of this, this paper constructs the firstHypothesis 1.
Hypothesis 1
(H 1) : The population shrinkage of rural employment in prefecture-level cities in H province hinders the economic development of these cities.
Ruan Rongping believes that there is a certain relationship between the continuous loss of population and human capital, and the loss of labor leads to the continuous decrease of human capital. Other scholars believe that the quality and quantity of human capital have a significant positive effect on the growth of agricultural economy. Zhao Xindong believes that human capital has a significantly positive effect on labor productivity, and different human capital characteristics have different effects on labor productivity(Zhao Xindong& Li Xiang,2020). Zhou Shenbei believes that the increase in agricultural labor productivity has an inhibitory effect on the income gap between urban and rural areas(Zhou Shenbei,2020), and Barro argues that manpower is the driving force for long-term economic growth. As H province is a large agricultural province, the number of employees in the primary industry accounts for the highest proportion of the number of employees in the three industries(Barro,R. J,1991), And the loss of human capital, which is the core of the shrinkage of rural employment. In summary, the concept of "the population shrinkage of rural employment -- labor productivity -- economic development" is proposed. This is Hypothesis 2.
Hypothesis 2
(H 2): The population shrinkage of rural employment leads to the change of labor productivity, which hinders the economic development of prefecture-level cities.
Model Design and Variable Explanation
Model Design
Based on the above analysis, in order to verify the influence of rural employment population shrinkage on the economic development of prefecture-level cities, the benchmark regression model constructed in this paper is set as follows :
gdpit = αShrinkit + β′Xit′+γi + λt + µit (1)
The subscripts i and t of the above equation represent a prefecture-level city and time respectively, gdpit represents the economic development level of prefecture-level city i, and α is the key observation value of this paper, indicating the reference coefficient of the population shrinkage of rural employment on the economic development level of prefecture-level cities. β ′ is the coefficient matrix of control variables, Xit ′ represents the matrix combination of control variables, γi represents the fixed effect of prefecture-level cities, λt represents the fixed effect of years, and µit represents the random disturbance term.
From (1), we can find the coefficient α is the focus of this paper, but there are some missing variables and endogenous problems in the equation. The main performance is that the population shrinkage of rural employment leads to the reduction of the economic development of prefecture-level cities. On the other hand, the low economic development of prefecture-level cities reversely intensifies the loss of rural employment. There is a causal relationship between them. Although this paper introduces control variables through literature review to reduce the endogenous problems, it can not completely solve the problem of variable omission and endogenous problems. Therefore, we use the instrumental variable method to solve the endogenous problem and missing variable problem. We select the change of the number of people aged 15–64 as the first instrumental variable, which is approximately in line with the actual situation of the legal employment age and is highly related to the variable of rural employment. In the selection of the second instrumental variable, we take the change of the number of employees in the service industry as the instrumental variable. In order to further explore the influence mechanism of the population shrinkage of rural employment on the economic development in the prefecture-level city, we construct the following model :
gdpit=aShrinkit+bXit′+ci+dt+£it (2)
LP = a′Shinkit+b′Xit+ci′+bt′+µit′ (3)
gdpit=jShrinkit+kLP + lXit′+ui+ot+pit (4)
LP is labor productivity. We use the stepwise regression method for empirical analysis. The first step is to test the coefficient a of the Eq. (2). If it is significant, it proves that there may be an intermediary effect, otherwise the experiment will stop; In the second step, we test whether the regression coefficient a′ of the Eq. (3) and the coefficient of determination k of Eq. (4) are significant. If they are significant at the same time, the intermediary effect exists. Continue with the third step. If both are not significant or only one coefficient is significant, we conduct Sobel test; In the third step, we judge the significance of the coefficient J of Eq. (4). If it is not significant, there is a complete intermediary effect. We believe that the impact of the population shrinkage of rural employment on the economic development of the prefecture-level city entirely through labor productivity. Otherwise, it is part of the intermediary effect. We believe that the population shrinkage of rural employment has a direct influence on the economic development of prefecture-level city, and the other part has an indirect influence on the economic development of prefecture-level city through labor productivity.
Data and Variable Explanation
Data Sources and Tools
This paper selects the data of 2012 as the base period, and the panel data of 16 prefecture level cities in H province from 2013 to 2019 as the sample. The original data are from the statistical yearbook of H province and the official website of H Provincial Bureau of statistics, and some missing data are from Internet query. In this paper, Stata 15 is used for operation, and the specific variables are explained as follows.
Variable Explanation
Explained variable: economic development. The economic development of a region can be operationalized by multiple relevant indicators, but GDP is widely used to measure it. We select the per capita GDP of prefecture-level cities to measure it. If the per capita GDP of a region is higher, the economic development level of the region is higher, and vice versa (Zhang Mingdou& Qu Junxi,2020).
Core explanatory variable: rural employment population shrinkage. Although there is no consensus on the definition of rural contraction in China, scholars generally adopt its core feature, that is, population change(Martinez-Fernandezetal,2016). On the calculation formula of rural employment contraction, we chose Murdoch’s study on shrinkage(2018) employment.
The absolute value of Shrinkit represents the degree of shrinkage. For the intermediate variable, we choose labor productivity, namely formula (6), and TWPIT represents the total number of employed people in prefecture-level city i at the end of year t.
Table 1
Variable names and meanings
Type
|
Major variable
|
Symbol
|
Explaination
|
explained variable
|
level of economic development
|
gdpit
|
gdpit per capita
|
core explanatory variable
|
rural shrinkage
|
Shrinkit
|
the population of rural employment
|
mediator variables
|
labor productivity
|
LP
|
GDPit/ Total employment population
|
|
illiteracy rate
|
ed
|
illiterate population/total population
|
|
urbanization levels
|
du
|
urban population/total population
|
|
level of innovation in science and technology
|
pat
|
total population of scientific research in society
|
control variables
|
trade volume utilization rate
|
fc
|
total import and export volume of commodities / GDPit
|
|
gender ratio
|
gender
|
male-female ratio
|
|
household disposable income
|
FDI
|
annual household income
|
|
utilization rate of fixed asset
|
fau
|
fixed asset investment/GDPit
|
|
gross fixed asset formation
|
fa
|
fixed assets investment
|
Table 2
Statistical characteristics of various variables(n = 112)
|
Variable name
|
Symbol
|
Mean value
|
Standard deviation
|
Minimum value
|
Maximum value
|
dependant variable
|
level of economic development
|
gdpit
|
4.416
|
2.095
|
1.430
|
11.510
|
independent variable
|
tural shrinkage
|
Shrinkit
|
-0.024
|
0.033
|
-0.110
|
0.032
|
mediator variables
|
labor productivity
|
LP
|
6.620
|
3.305
|
2.283
|
16.955
|
control variables
|
illiteracy rate
|
ed
|
0.055
|
0.011
|
0.032
|
0.090
|
urbanization levels
|
du
|
0.530
|
0.100
|
0.340
|
0.760
|
level of innovation in science and technology
|
pat
|
1.287
|
1.698
|
0.160
|
8.603
|
trade volume utilization rate
|
fc
|
0.118
|
0.113
|
0.020
|
0.680
|
gender ratio
|
gender
|
1.018
|
0.027
|
0.961
|
1.102
|
household disposable income
|
FDI
|
2.809
|
0.568
|
2.060
|
4.556
|
utilization rate of fixed asset
|
Au
|
2.364
|
0.566
|
1.373
|
3.852
|
gross fixed asset formation
|
Fa
|
0.375
|
0.316
|
0.104
|
1.735
|
From the simple descriptive statistics of variables, it can be found that there are large differences in the level of economic development, labor productivity and science and technology innovation level among prefecture-level cities. The general education level in prefecture-level cities is high, and the urbanization level in prefecture-level cities accounts for about half of the area of prefecture-level cities. The utilization rate of trade volume of commodities in prefecture-level cities is not high, and the utilization rate of fixed asset investment is high. The gender ratio in prefecture-level cities is relatively balanced. On the whole, compared with the population of rural employment in 2012, the population of rural employment in prefecture-level cities in 2013–2019 showed a significant shrinkage.
Empirical Test Results and Analysis
Regression Results
Firstly, Vif test 4.48 eliminates the collinearity problem. Pwcor test shows that the contraction of rural labor force, the number of workers of service industry and the number of school-age workers at the level of 1% significantly meet the requirements of instrumental variables. Secondly, the over identification test is 0.5621. It accepts the original assumption that "all instrumental variables are exogenous" has nothing to do with the disturbance term, that is, it meets the two requirements of instrumental variables.
We added all control variables to perform 2SLS regression on instrumental variables. The first stage regression results showed that the f-value statistic was 67.3793, which was much greater than 10, excluding the problem of weak instrumental variables. In order to increase the accuracy of the experiment, we add the fixed effect of year and prefecture-level cities in the 2sls regression and mediation mechanism test to improve the accuracy of the model. In view of the possible two-way causal relationship between the core explanatory variable and the independent variable, we use the instrumental variable 2SLS regression. The regression results show that the control variable and the core explanatory variable are significantly correlated with the explained variable at the level of 1%, and the correlation coefficient is -10.820, that is, every percentage point increase in the shrinkage of rural employment population, the economic development of prefecture level cities will drop by 10.820 percentage points. Without the control variable, the core explanatory variable, it is significantly correlated with the explained variable at the level of 1%, and the correlation coefficient is -21.310, that is, for each percentage point increase in the shrinkage of rural labor force, the economic development of prefecture level cities will decrease by 21.310 percentage points. On the one hand, it can be found that the addition of control variables makes the absolute value of the coefficient smaller. We believe that the control variables effectively eliminate the interference of other variables except the core explanatory variable. What’s more, as far as the control variables are concerned, the urbanization level is obvious at the level of 1% and the coefficient is 21.254, which means that the urbanization level has a positive influence on the economic development of the prefecture-level city. The high absolute value of the coefficient indicates that the urbanization level has a strong influence on the economic development of the loss of rural employment. Household disposable income is significant at the 1% level and the coefficient is 0.489, which means that household disposable income has a positive effect on promoting the economic development of the prefecture-level city, but the absolute value of the coefficient is low, indicating that the influence of household disposable income on the loss of rural employment on economic development is weak. On the other hand, whether the control variable is added or not, it can be found that the coefficients of the core explanatory variables are negative and significant. We believe that the shrinkage of rural labor force has hindered the economic development of the prefecture-level cities, and assumption 1 is confirmed, which is shown in Table 3.
Table 3
|
Model (1)
|
Model (2)
|
Shrinkit
|
-21.310 ***
|
10.820***
|
|
(-3.48)
|
(-2.6)
|
ed
|
|
10.201
|
|
|
(1.35)
|
du
|
|
21.254***
|
|
|
(2.71)
|
pat
|
|
0.248
|
|
|
(1.40)
|
fc
|
|
-0.359
|
|
|
(-0.36)
|
gender
|
|
-0.274
|
|
|
(-0.11)
|
FDI
|
|
0.489***
|
|
|
(2.75)
|
fau
|
|
-0.603 ***
|
|
|
(-2.7)
|
fa
|
|
4.131**
|
|
|
(2.34)
|
control variables
|
NO
|
YES
|
the fixed effect of prefecture-level cities
|
YES
|
YES
|
the fixed effect of year
|
YES
|
YES
|
estimation method
|
2sls
|
2sls
|
N
|
112
|
112
|
R2
|
0.9421
|
0.9761
|
Note: *p < .05 *** p < 01 |
Test of Action Mechanism
To clarify the mechanism of the impact of the contraction of the rural employment population on the economic development of the local city, labor productivity is selected as the medium according to the comical literature The parameters are tested using the step-by-step regression Eq. (2)–(4), as shown in Table 4. Where model 1 is the first step in the baseline regression model as the intermediary effect to verify the existence of the intermediary effect mechanism, models 2 and 3 represent labor productivity as intermediate variables for conformity with the experimental preset.
Table 4
|
Model (1)
|
Model (2)
|
Model (3)
|
explained variable
|
gdpit
|
LP
|
gdpit
|
LP
|
|
|
0.463 ***
|
|
|
|
(7.70)
|
Shrinkit
|
10.820***
|
17.731***
|
2.577
|
|
(-2.6)
|
(-3.11)
|
(-0.77)
|
ed
|
10.201
|
20.829**
|
-0.536
|
|
(1.35)
|
(2.08)
|
(0.09)
|
du
|
21.254***
|
-5.164
|
23.642***
|
|
(2.71)
|
(-0.46)
|
(4.35)
|
pat
|
0.248
|
0.312
|
0.103
|
|
(1.40)
|
(1.22)
|
(1.05)
|
fc
|
-0.359
|
-0.442
|
-0.158
|
|
(-0.36)
|
(-0.31)
|
(-0.17)
|
gender
|
-0.274
|
2.983
|
-1.645
|
|
(-0.11)
|
(0.78)
|
(-1.16)
|
FDI
|
0.489***
|
0.845***
|
0.098
|
|
(2.75)
|
(3.27)
|
(0.70)
|
fau
|
-0.603 ***
|
-0.161
|
0.529***
|
|
(-2.7)
|
(-0.68)
|
(-3.36)
|
fa
|
4.131**
|
4.288**
|
2.147 *
|
|
(2.34)
|
(2.14)
|
(1.95)
|
the fixed effect of prefecture-level cities
|
Yes
|
Yes
|
Yes
|
the fixed effect of year
|
Yes
|
Yes
|
Yes
|
N
|
112
|
112
|
112
|
R2
|
0.9761
|
0.9795
|
0.9888
|
Note: *p < .05 *** p < 01 |
According to the robustness test mechanism, it is found that the core explanatory variables of model 1 are significant, and there may be a mediating effect mechanism. Secondly, the core explanatory variables of models 2 and 3 also significantly prove the existence of mediating effect mechanism. Further analysis found that:
Through the test results of model 1, we can find that the influence of the shrinkage of rural employment population on the economic development of the prefecture-level city is significant at the level of 1%, and the coefficient is -10.820. The level of urbanization, household disposable income and the utilization rate of fixed assets have a positive and negative significant influence on the economic development at the level of 1%. That is, every 1 percentage point increase in the shrinkage of rural employment population will weaken the influence on the economic development of the region by 10.820 percentage points. Every 1 percentage point increase in the level of urbanization and household disposable income can bring benefits of economic development levels of 21.254 and 0.489 percentage points. It is also worth noting that the utilization rate of fixed assets is significantly negatively correlated with the level of economic development in the region. We believe that too much investment in fixed assets is not conducive to the improvement of the level of economic development in the region.
Model 2 shows that when the explained variable is replaced by the mediator variable——labor productivity, the significant coefficient of the contraction of rural employment at the level of 1% is -17.731. Therefore, it is believed that the shrinkage of rural employment population has a negative impact on the labor productivity in the prefecture-level city. When the rural employment population shrinks by 1 percentage point, the labor productivity in the prefecture-level city will decrease by 17.731 percentage points. It is worth noting that in Model 2, household disposable income is positively and significantly correlated with labor productivity at the 1% level, that is, every one percentage point increase in household disposable income can increase labor productivity by 0.845 percentage points. In Model 2, the illiteracy rate and the total investment in fixed assets are positively and significantly correlated with the economic development in the prefecture-level city at the level of 5%. We believe that the increase of these two control variables is conducive to the improvement of the level of economic development in the region.
By observing Model 3, we can find that after introducing the mediator variable——labor productivity, the significant coefficient of labor productivity at the level of 1% is 0.463, indicating that one percentage point increase in labor productivity contributes 0.463 percentage points to the economic development of the prefecture-level city. At this time, the coefficient of rural employment populaton is still negative and the coefficient is-2.577. The decrease of absolute value of rural employment shows that the decrease of rural employment population is acted on the core explanatory variable through mediator variable——labor productivity, that is, the influence of rural employment population shrinkage on the economic development of the prefecture-level city is fully mediated by labor productivity. This situation is called full mediating effect.
Robustness Test
We replace the core explained variables of the model to determine whether they are significant and whether the positive and negative signs change, so as to determine robustness. Since labor productivity has a strong positive synergy with urban economic growth, this paper also verifies that labor productivity has a positive role in promoting urban economic development at the level of 1%, so we can use labor productivity to replace urban economic development. We replace the core explained variable with labor productivity in the process of using instrumental variable 2sls regression, and the results show that the shrinkage of rural employment population still has a negative and significant influence on labor productivity, which confirms the robustness of the results of this paper.
Conclusions and Prospect
Research Conclusions
Based on the human resource theory, this paper empirically studies the influence path of the loss of rural employment on the economic development in the region on the basis of considering the influence of the shrinkage of rural employment population on the economic development in the prefecture-level city. The main findings are as follows :
As a major agricultural province, H province can find that the shrinkage of rural employment population in its prefecture-level cities generally does not bring positive benefits. On the contrary, the continuous loss of rural employment hinders the economic development in the prefecture-level cities. It is worth noting that the urbanization level and household disposable income also have a significantly positive effect on the economic development in the region. The positive effect of household disposable income can offset some of the negative effects brought by the contraction of rural employment, but its contribution is slightly less than the negative effects. Secondly, over investment in fixed assets will also aggravate the negative effects of the shrinkage of rural employment population to a certain extent.
The shrinkage of rural employment population in H province will not only have a direct influence on the economic development of the region, but also have a negative impact on the labor productivity of the whole society in the region. This effect is manifested in the continuous shrinkage of rural employment population, which greatly reduces the number of end-of-year employed workers in prefecture-level cities, and then hinders the economic development of these cities.
Research Prospect
The main reason for the decrease of rural employment population in H province is the continuous outflow of population caused by income gap. Therefore, it is necessary to enhance the quality of life of rural residents and strengthen people's sense of belonging to slow down the loss of rural employment. Local governments need to promote urbanization, do a good job in urban layout and planning, and provide good infrastructure supporting construction for urban development.
On the other hand, it is necessary to fully implement the concept of rural revitalization and development, continuously increase capital investment in rural areas, encourage innovation and entrepreneurship in rural areas, and improve the investment environment in rural areas to improve the quantity and quality of rural human capital.
Local governments should pay full attention to the increasingly normalized phenomenon of rural shrinkage, that is, abandon the traditional laissez-faire of shrinkage, and adopt positive "smart shrinkage"strategies to deal with this phenomenon. The government should rationally plan the spatial layout and make full use of the resources brought by idle land in the face of the hollowing out of rural areas caused by continuous shrinkage.
At the same time, whether this problem has the same effect on other provinces needs to be further tested. This paper mainly investigates the large agricultural province, where the primary industry accounts for a large proportion, so the shrinkage of rural employment population has a blocking effect on economic development. Whether similar large agricultural provinces have similar phenomena and whether the provinces with high proportion of secondary and tertiary industries are inconsistent with the conclusions of this paper need to be further studied.(Lv X B& Li Zo,2020).