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Property rights, labour markets, and efficiency in a transition economy: the case of rural China

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  • Dwayne Benjamin
  • Loren Brandt

Abstract

We investigate the consequences of imperfect factor market development for farm efficiency in North China. We estimate the extent to which an inverse relationship in farm productivity can be attributed to the administrative (as opposed to market) allocation of land, combined with unevenly developed off-farm opportunities. Using a new household survey, we find considerable inefficiency in the use of labour. This inefficiency is alleviated by external labour markets and, to a limited degree, by administrative reallocations. The reallocations do not go far enough, however, which raises important questions about constraints on rental activity and property rights formation more generally.

Suggested Citation

  • 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.
    • Handle: RePEc:cje:issued:v:35:y:2002:i:4:p:689-716
    DOI: 10.1111/1540-5982.00150
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    JEL classification:

    • 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, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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