Is the income difference affecting off-farm employment decision? Evidence from Chinese households

Abstract: China is experiencing a rapid economic transformation, which witnesses a vast number of labourers moving out of agricultural sectors. In such a transformation, the effect of spatial income variance on labour’s off-farm work decision is still unclear. Based on the cross-sectional data from the national survey conducted in 2012, this study finds the effect on two kinds of off-farm employment, wage employment and self-employment. The empirical result shows that local income will significantly influence both types of off-farm employment, while it positively affects the decision towards wage employment and negatively affects those in self-employment.