Property Rights and Internal Migration: The Case of the Stolypin Agrarian Reform in the Russian Empire
While economists have little question about the potential for liquidity constraints to influence the migration decision, the relative importance of these constraints has resisted empirical verification. The unique nature of the Stolypin agrarian reform in Russia provides a natural experiment with exogenous variation in liquidity constraints. The reform gives peasants the right to withdraw from the commune and to sell one's share of land. Previously liquidity constrained households could then take this opportunity to migrate to less populated areas. Some communes were not affected by the reform, permitting difference-in-differences analysis. Using a panel of historical data from 1901-1914 on regional migration, we find a strong positive correlation between the reform and migration. We employ instrumental variables to address the possible endogeneity due to omitted factors that might drive both commune exit and migration.
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