Dianshuang Wang

This book integrates the agricultural producer service sector into a three-sector general equilibrium framework to examine the modernization of small-scale agriculture in developing economies. By incorporating agricultural transformation and rural-urban migration dynamics, it presents a theoretical analysis of the determinants of wage inequality between skilled and unskilled labor from multiple perspectives. Over the past few decades, industrialization and urbanization have progressed in parallel, driving the modernization of the agricultural sector. Traditional development economics often conceptualizes agricultural modernization within the context of large-scale operations, assuming that traditional agriculture can directly adopt modern non-agricultural intermediate inputs after some transformations. However, small-scale agriculture—the dominant form in developing countries—follows a distinct modernization path. This divergence manifests in two key ways. First, labor substitution and migration. The introduction of modern intermediate non-agricultural inputs tends to displace agricultural labor, accelerating rural-urban migration. Second, the role of the agricultural producer service sector: Due to the prevalence of small-scale operations, an intermediary sector—the agricultural producer service sector—emerges to...