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Moving off the farm: Land institutions to facilitate structural transformation and agricultural productivity growth in China

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  • Deininger, Klaus
  • Jin, Songqing
  • Xia, Fang

Abstract

Agriculture has made major contributions to China's economic growth and poverty reduction, but the literature has rarely focused on the institutional factors that might underpin such structural transformation and productivity. This paper aims to fill that gap. Drawing on an 8-year panel of 1,200 households in six key provinces, it explores the impact of government land reallocations and formal land-use certificates on agricultural productivity growth, as well as the likelihood of households to exit from agriculture or send family members to the non-farm sector. It finds that land tenure insecurity, measured by the history of past land reallocations, discourages households from quitting agriculture. The recognitionof land rights through formal certificates encourages the temporary migration of rural labor. Both factors have a large impact on productivity (at about 30 percent each), mainly by encouraging market-based land transfers. A sustained increase in non-agricultural opportunities will likely reinforce the importance of secure land tenure, which is a precondition for successful structural transformation and continued economic attractiveness of rural areas.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5949.

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Date of creation: 01 Jan 2012
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Handle: RePEc:wbk:wbrwps:5949

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Keywords: Labor Policies; Rural Development Knowledge&Information Systems; Economic Theory&Research; Economic Growth; Rural Poverty Reduction;

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Cited by:
  1. World Bank, 2012. "Reshaping Egypt's Economic Geography : Domestic Integration as a Development Platform," World Bank Other Operational Studies 11869, The World Bank.
  2. World Bank, 2012. "Arab Republic of Egypt - Reshaping Egypt's Economic Geography : Domestic Integration as a Development Platform, Volume 1," World Bank Other Operational Studies 11903, The World Bank.

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