Industrial Upgrade, Adverse Employment Shock and Land Centralization

Traditional Development Economics defines economic development in the view of transferring rural surplus labor force. It implies the industrialization is in a static state at a certain level while it is in a process of continuous industrial upgrade in reality. Under the circumstances, we analyze phenomenon followed by the upgrading of industrial structure such as return migration and mid-aged rural labors’ difficulty in job-hunting and demonstrated the influence of land centralization based on the practice of industrial upgrade and rural change in Suzhou. Finally it come to the conclusion that because of the extensive competition on simple-labor market, the industrial upgrade will make a adverse employment shock upon mid-aged rural labor which will lead to the more uncertainty of peasants to get jobs in the industrial section . If government takes an improper policy of land centralization, peasants will lose guarantee in the future and resist the land centralization. After the comparison between one-off compensation and land cooperation, a further demonstration show that the method of one-off compensation will depress peasants’ enthusiasm in land centralization while the form of land cooperation can guarantee and promote peasants’ welfare under the given institution of land ownership. As a result, land cooperation allows the smooth operation of land centralization and supports the industrial upgrade to some extent.