On Health And Off-Farm Employment

Investment in health was traditionally treated as pure consumption in China. It was defined as a kind of social welfare and was neglected by the government for a rather long period. However, by the human capital theory, health, as one of the four components of human capital play an important role in both micro and macro economies. On micro level, it effects on occupational choices, labor participation and labor market performance; on macro level, it may affect the economic growth directly.Since the market-oriented reform, the rural residents regained the managerial rights, and also they have more rights to choose occupation than before. With the decline of the cultivate revenue, off-farm employment become more and more important in increasing their income. From the transition and development angle, off-farm employment is helpful to reduce the rural-urban gap and to realize the comprehensive wealth object. While with the termination of rural collection, the rural cooperative health insurance system was collapsed, and the provision of public health services was dwindled, there are less protection on rural residents health than before.Using 1993 China nutrition survey data, the relationship between health and labor performance was explored in this paper. This paper tends to give evidence on the linkage between health and income in China in micro level. The research framework of the paper as follows:Beginning with a brief introduction, the research background was given in the first chapter, then comes the theoretical model and empirical specification. After a short review on health measurement, two health components were drawn by principal component method in the chapter three. Using Probit model, the decision of off-farm employment was analyzed in chapter four, accompany with the analysis of decision on labor participation and agricultural work participation. The paper examined the relationship between health and labor market performance in the next three chapters by OLS and Heckman selection model. Finally, a robust examination was made, and naturally, a conclusion of the research's findings was reached in the last chapter.The main finding of the paper is that health status impact on labor participation and off-farm employment probability significantly, but it is not a significant determinant in cultivation participation. Also we did not find its significant impacts on labor performance for those off-farm employees. Still we believe the importance of health on off-farm employment as well as household income with consideration to the big role of the off-farm employment opportunity on household income.