The purpose of this study is to explore the relationship between migration, remittances and agricultural productivity by applying the new economics of labor migration model in the context of north‐west China. The specific objectives are to examine the impacts of rural out‐migration on agricultural productivity in various farming systems, and whether remittances have been reinvested in agriculture.
Cross‐sectional household survey data from three townships were analyzed with the three‐stage least squares (3SLS) regression model.
In multi‐cropping small farming systems, at least in the short run, the loss resulting from losing family labour on lower‐return grain crop production is likely to be offset by the gain from investing in capital‐intensive and profitable cash crop production.
This study provides empirical evidence for the MELM theory. It expands Taylor et al.'s studies by comparing investment behavior and production choices among multiple farm activities, and enriches previous studies by showing that the relation between remittances and agricultural investment depends on the farm activities' profitability.
