Analysis on the Income Effect of Farmers’ Cooperative Management: Based on the Chinese Practice

Abstract

This paper makes a theoretical analysis of farmers' income and career choice under the two modes of traditional and cooperative management, demonstrates the "direct effect" and "indirect effect" of cooperative operation on farmers' income, and puts forward three influence mechanisms: (1) cooperative operation improves traditional agricultural operation through institutional advantages, making agricultural economy obtain Pareto improved income by operational efficiency; (2) cooperative operation can adjust the imbalance between supply and demand of skilled labor between agricultural and non-agricultural sectors, which makes agricultural economy obtain Pareto improvement income by optimizing the use of labor elements; (3) cooperative operation reduces the skill leverage of non-agricultural employment of labor force under the traditional agricultural management model by providing more career choices for labor force, and promotes the equal distribution of farmers' income. On this basis, this paper apply the 1995-2018 National Household Survey Data, using the continuous DID model to verify the mechanism of cooperative operation on farmers' income.