This paper examines a possible connection between China's massive rural to urban migration and high chemical fertilizer use rates during the late 1980s and 1990s. Using panel data on villages in rural China (1987-2002), we find that labor out-migration and fertilizer use per hectare are positively correlated. Using 2SLS, employing the opening of a Special Economic Zone in a nearby city as an instrument, we find that village fertilizer use is linked to contemporaneous short-term out-migration of farm workers. We also examine the long-term environmental consequences of chemical fertilizer use during this period. Using OLS, we find that fertilizer use intensity is correlated with future fertilizer use rates and diminished effectiveness of fertilizer, demonstrating persistency in use patterns, and suggesting that in areas with high use of fertilizer, the land is becoming less responsive. We also demonstrate that fertilizer use within a river basin is correlated with organic forms of water pollution, suggesting that industrialization has induced pollution in China both directly and through its impact on rural labor supply.
|NBER working paper series
|National Bureau of Economic Research