[The movement of rural labor and the establishment of small towns as suggested by factors of production].]

The movement of the labor force from rural areas into urban areas, specifically into small cities and towns, is examined using data from a survey of the Yiyang area of China. It is noted that a surplus in the agricultural labor force has resulted from changes in agricultural productivity. Consequently, the authors point out, farmers are either transferring from rural areas into industrial and service sectors in small cities and towns or are remaining in the rural areas to be employed by collective enterprises. Advantages and disadvantages of these trends are discussed.