THE SUPPLY OF LABOR BY INDIVIDUALS TO A CHINESE COLLECTIVE FARM - THE CASE OF DAHE COMMUNE

We provide the first econometric tests of the theory of individual labour supply in a collective farm on data at the individual level. The data are for members of five production teams in a commune in Hebei province in 1979. Our switching regressions model does not provide evidence of a significant labour supply response to differences in anticipated earnings. We argue, however, that this failure may be indirect evidence of 'under-differentiation' of payments, due to egalitarian ideology. More importantly, we provide the first econometric evidence of three significant findings about China's collective agriculture. First, our results imply that much of the labour supplied to the teams studied was discretionary, and not a response to coercive work norms. Second, and a corollary to the first result, is the implication that another significant portion of labour supplied was so coerced. Third, and finally, we find support for theoretical models which predict that labour could be oversupplied because marginal payments reflected labour's average net product rather than its marginal product.