Land Security and Labor Specialization : Evidence from Rural China

This paper develops a model to understand the mechanism that might explain how land rights security may facilitate labor specialization. The theoretical framework suggests that with secured land rights, households with high farming ability are likely to invest in land while households with low farming ability tend to investment in human capital and migrate. Land security is identified as whether the village has adopted small-scale land adjustments. Using data from China Living Standard Survey, empirical results suggest that secured land rights increase ruralurban migration for households with low farming ability and land investment for those with high farming ability. In addition, land security presents a sorting function in employment decisions. Secured land rights promote participation in non-farm jobs such as migration and local wage employments while decreasing the probability in being full-time farmers. In rural China, government action to increase land security can facilitate the poor to participate in the non-farm sector. I am grateful to the members of my dissertation committee, Judith Thornton, Seik Kim, Susan Whiting and Hendrik Wolff for their advice and encouragement. I have benefitted also from other members of the economics department faculty, staff and my fellow graduate students. I would like to thank the labor seminars and participants. I am grateful to the Center for Studies in Demography and Ecology for the opportunities to present my working papers and for the constructive feedback from the audience.