Aging of the labor force and technical efficiency in crop production: Evidence from Liaoning province, China

Purpose – The purpose of this paper is to analyze the extent of aging in the agricultural labor force and its effect on farm production in a province of China. Design/methodology/approach – The analysis uses panel data for the years 2004 through 2008 from a representative sample of farm households in Liaoning province. Descriptive statistics reveal the age structure of the agricultural labor force and correlations between labor force age and production characteristics. A translog stochastic frontier production function and technical inefficiency model is employed to analyze the effect of aging of the labor force on the technical efficiency of crop production. Findings – The paper finds an accelerating trend towards aging of the agricultural labor force in the data. Results from the stochastic frontier production function and efficiency analysis reveal that household-level technical efficiency increases until maximum efficiency is reached when the average age of the household labor force is 45, after which efficiency declines. Practical implications – Aging of China's rural labor force may affect efficiency and productivity in crop production. Agricultural policies may need to pay more attention to the aging of the agricultural labor force. Some measures should be taken to address the pattern of migration, and policies to improve the social and economic environment in rural areas for younger workers should be developed. Also, extension programs could help older farmers to maintain efficient farming methods. Originality/value – This is one of very few analyses of the effects of aging on production efficiency for a developing country, as well as for China. The analysis uses a unique panel dataset that covers 24 counties, 1,890 rural households, and more than 6,000 individuals, with each household tracked for five years. Most of the literature estimating technical efficiency carries out the analysis at the individual level; in China and other developing countries, farming is carried out at the household level. We have adapted the methodology to apply to situations where the unit of analysis is the household.