Property Rights, Labor Markets, and Efficiency in a Transition Economy: The Case of Rural China
AbstractThis paper investigates the consequences of imperfect and uneven factor market development for farm efficiency in rural China. In particular, we estimate the extent to which an inverse relationship in farm productivity can be attributed to the administrative (instead of market) allocation of land, and the extent of unevenly developed non-agricultural opportunities. Using a recently collected household survey, we show that a considerable amount of inefficiency exists in the countryside, especially in the employment of labor. Our results show that this inefficiency is alleviated by the development of external labor markets, but perhaps more surprisingly, that in the context of the current imperfect market environment, administrative reallocations help improve both efficiency and equity on the margin. They do not go far enough, however, which raises important questions about constraints on rental activity and the link between administrative reallocation and decentralized land exchange.
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Bibliographic InfoPaper provided by University of Toronto, Department of Economics in its series Working Papers with number benjamin-00-02.
Length: 48 pages
Date of creation: 11 Apr 2000
Date of revision:
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Other versions of this item:
- Dwayne Benjamin & Loren Brandt, 2002. "Property rights, labour markets, and efficiency in a transition economy: the case of rural China," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 689-716, November.
- Loren Brandt & Dwayne Benjamin, 2002. "Property Rights, Labour Markets, and Efficiency in a Transition Economy: The Case of Rural China," William Davidson Institute Working Papers Series 518, William Davidson Institute at the University of Michigan.
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
- Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-AGR-2000-05-30 (Agricultural Economics)
- NEP-ALL-2000-05-30 (All new papers)
- NEP-DEV-2000-05-30 (Development)
- NEP-EFF-2000-05-30 (Efficiency & Productivity)
- NEP-LAB-2000-05-30 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Matthew A. Turner & Loren Brandt & Scott Rozelle, 1999. "Property Rights Formation and the Organization of Exchange and Production in Rural China," William Davidson Institute Working Papers Series 250, William Davidson Institute at the University of Michigan.
- Benjamin, Dwayne & Brandt, Loren, 1997. "Land, Factor Markets, and Inequality in Rural China: Historical Evidence," Explorations in Economic History, Elsevier, vol. 34(4), pages 460-494, October.
- Dwayne Benjamin & Loren Brandt & Paul Glewwe & Li Guo, 2000.
"Markets, Human Capital, and Inequality: Evidence from Rural China,"
benjamin-00-01, University of Toronto, Department of Economics.
- Dwayne Benjamin & Loren Brandt & Paul Glewwe & Li Guo, 2000. "Markets, Human Capital, and Inequality: Evidence from Rural China," William Davidson Institute Working Papers Series 298, William Davidson Institute at the University of Michigan.
- Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1995.
"Power, distortions, revolt and reform in agricultural land relations,"
Handbook of Development Economics,
in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 42, pages 2659-2772
- Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1993. "Power, distortions, revolt, and reform in agricultural land relations," Policy Research Working Paper Series 1164, The World Bank.
- Carter, Michael R, 1984. "Identification of the Inverse Relationship between Farm Size and Productivity: An Empirical Analysis of Peasant Agricultural Production," Oxford Economic Papers, Oxford University Press, vol. 36(1), pages 131-45, March.
- Bhalla, Surjit S., 1988. "Does land quality matter? : Theory and measurement," Journal of Development Economics, Elsevier, vol. 29(1), pages 45-62, July.
- John C. Ham & Kevin T. Reilly, 2002. "Testing Intertemporal Substitution, Implicit Contracts, and Hours Restriction Models of the Labor Market Using Micro Data," American Economic Review, American Economic Association, vol. 92(4), pages 905-927, September.
- Benjamin, Dwayne, 1995. "Can unobserved land quality explain the inverse productivity relationship?," Journal of Development Economics, Elsevier, vol. 46(1), pages 51-84, February.
- Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
- Benjamin, Dwayne, 1992. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models," Econometrica, Econometric Society, vol. 60(2), pages 287-322, March.
- Udry, Christopher, 1996. "Gender, Agricultural Production, and the Theory of the Household," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 1010-46, October.
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