Post-Lewis Turning Point Era : Are Increasing Wages a Threat to China's Grain Production

China reached the Lewis turning point in the first decade of the twenty-first century. While the impact of increasing wages was insignificant in the pre-Lewis turning point era, its negative impact on agriculture may be substantial in the post-Lewis turning point era. By analyzing a theoretical model, this study first shows that increasing wages have different impacts on labor-intensive and labor-extensive crops. Using nationally representative household-level panel data, the empirical analyses confirm these results. Importantly, contrary to the worry that this impact will be negative, this study shows that sown area of grain crops increases following wage increases because of the mechanization that results from the increasing wages in the post-Lewis turning point era