IDEAS home Printed from https://ideas.repec.org/p/gpe/wpaper/15005.html
   My bibliography  Save this paper

Agrarian Structures, Urbanization, and Inequality

Author

Listed:
  • Oyvat, Cem

Abstract

This study examines the impact of agrarian structures on income inequality over the long run. First, it exhibits the relationship between land and income distribution by developing a theoretical model based on Harris and Todaro (1970) and Lewis (1954). High land inequality increases income Gini coefficients in the urban sector as well as the rural sector, not only by creating congestion in the urban subsistence sector, but also by feeding the growth of the urban reserve army of labor, which pulls down the wages in the urban capitalist sector. Next, the study investigates the empirical relationship between land inequality, level of urbanization and income inequality using cross country datasets. The estimation results support the theoretical model and indicate that the level of land inequality has a significant impact on determining the level of urbanization, and urban and overall income inequalities. Moreover, the analysis finds that overurbanization increases income inequality. The empirical analysis controls for institutional factors like education inequality and the level of democracy. The results present a stronger evidence on the land inequality’s influence through urbanization than through education and democracy. These results suggest that policymakers should have a broader view as to the importance of agrarian policies. A progressive land reform or/and subsidies protecting small peasantry can also reduce urban income inequality and poverty over the long run.

Suggested Citation

  • Oyvat, Cem, 2016. "Agrarian Structures, Urbanization, and Inequality," Greenwich Papers in Political Economy 15005, University of Greenwich, Greenwich Political Economy Research Centre.
  • Handle: RePEc:gpe:wpaper:15005
    as

    Download full text from publisher

    File URL: http://gala.gre.ac.uk/15005/8/15005%20OYVAT_Agrarian_Structures_2016.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
    2. Ali Abdel Gadir Ali, "undated". "Globalization and Inequality in the Arab Region," API-Working Paper Series 0307, Arab Planning Institute - Kuwait, Information Center.
    3. Fajnzylber, Pablo & Maloney, William F., 2005. "Labor demand and trade reform in Latin America," Journal of International Economics, Elsevier, vol. 66(2), pages 423-446, July.
    4. Dutt, Amitava Krishna, 1984. "Stagnation, Income Distribution and Monopoly Power," Cambridge Journal of Economics, Oxford University Press, vol. 8(1), pages 25-40, March.
    5. Stark, Oded & Helmenstein, Christian & Prskawetz, Alexia, 1997. "A brain gain with a brain drain," Economics Letters, Elsevier, vol. 55(2), pages 227-234, August.
    6. Galor, Oded & Tsiddon, Daniel, 1996. "Income Distribution and Growth: The Kuznets Hypothesis Revisited," Economica, London School of Economics and Political Science, vol. 63(250), pages 103-117, Suppl..
    7. Bourguignon, Francois & Verdier, Thierry, 2000. "Oligarchy, democracy, inequality and growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 285-313, August.
    8. Robert Pollin, 2002. "Globalization and the Transition to Egalitarian Development," Working Papers wp42, Political Economy Research Institute, University of Massachusetts at Amherst.
    9. Michał Brzeziński & Krzysztof Kostro, 2010. "Income and consumption inequality in Poland, 1998–2008," Bank i Kredyt, Narodowy Bank Polski, vol. 41(4), pages 45-72.
    10. Ozler, Berk, 2007. "Not Separate, Not Equal: Poverty and Inequality in Post-apartheid South Africa," Economic Development and Cultural Change, University of Chicago Press, vol. 55(3), pages 487-529, April.
    11. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 35-52.
    12. Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 143-179.
    13. Thiesenhusen, William C. & Melmed-Sanjak, Jolyne, 1990. "Brazil's agrarian structure: Changes from 1970 through 1980," World Development, Elsevier, vol. 18(3), pages 393-415, March.
    14. Dietrich Vollrath, 2007. "Land Distribution and International Agricultural Productivity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(1), pages 202-216.
    15. Bowles, Samuel, 1970. "Migration as Investment: Empirical Tests of the Human Investment Approach to Geographical Mobility," The Review of Economics and Statistics, MIT Press, vol. 52(4), pages 356-362, November.
    16. Stanley L. Engerman & Kenneth Lee Sokoloff, 2002. "Factor Endowments, Inequality, and Paths of Development Among New World Economies," ECONOMIA JOURNAL, THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION - LACEA, vol. 0(Fall 2002), pages 41-110, August.
    17. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2008. "Trends in U.S. Wage Inequality: Revising the Revisionists," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 300-323, May.
    18. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," World Bank Economic Review, World Bank Group, vol. 10(3), pages 565-591, September.
    19. Frankema, Ewout, 2009. "The Expansion of Mass Education in Twentieth Century Latin America: A Global Comparative Perspective," Revista de Historia Económica, Cambridge University Press, vol. 27(03), pages 359-396, January.
    20. Agesa, Richard U, 2001. "Migration and the Urban to Rural Earnings Difference: A Sample Selection Approach," Economic Development and Cultural Change, University of Chicago Press, vol. 49(4), pages 847-865, July.
    21. Easterly, William, 2007. "Inequality does cause underdevelopment: Insights from a new instrument," Journal of Development Economics, Elsevier, vol. 84(2), pages 755-776, November.
    22. Tunali, Insan, 1996. "Migration and Remigration of Male Household Heads in Turkey, 1963-1973," Economic Development and Cultural Change, University of Chicago Press, vol. 45(1), pages 31-67, October.
    23. repec:dgr:rugggd:gd-149 is not listed on IDEAS
    24. List, John A & Gallet, Craig A, 1999. "The Kuznets Curve: What Happens after the Inverted-U?," Review of Development Economics, Wiley Blackwell, vol. 3(2), pages 200-206, June.
    25. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
    26. Anand, Sudhir & Kanbur, S M R, 1985. "Poverty under the Kuznets Process," Economic Journal, Royal Economic Society, vol. 95(380a), pages 42-50, Supplemen.
    27. Banerjee, Biswajit, 1983. "The Role of the Informal Sector in the Migration Process: A Test of Probabilistic Migration Models and Labour Market Segmentation for India," Oxford Economic Papers, Oxford University Press, vol. 35(3), pages 399-422, November.
    28. Tribble, Romie, Jr, 1999. "A Restatement of the S-Curve Hypothesis," Review of Development Economics, Wiley Blackwell, vol. 3(2), pages 207-214, June.
    29. Gerry, Chris, 1978. "Petty production and capitalist production in Dakar: The crisis of the self-employed," World Development, Elsevier, vol. 6(9-10), pages 1147-1160.
    30. Ewout Frankema, 2010. "The colonial roots of land inequality: geography, factor endowments, or institutions?," Economic History Review, Economic History Society, vol. 63(2), pages 418-451, May.
    31. Wolfgang F. Stolper & Paul A. Samuelson, 1941. "Protection and Real Wages," Review of Economic Studies, Oxford University Press, vol. 9(1), pages 58-73.
    32. Zhu, Nong, 2002. "The impacts of income gaps on migration decisions in China," China Economic Review, Elsevier, vol. 13(2-3), pages 213-230.
    33. James E. Rauch, 1993. "Economic Development, Urban Underemployment, and Income Inequality," Canadian Journal of Economics, Canadian Economics Association, vol. 26(4), pages 901-918, November.
    34. Swati Basu & Saul Estrin & Jan Svejnar, 2000. "Employment and Wages in Enterprises Under Communism and in Transition: Evidence from Central Europe and Russia," William Davidson Institute Working Papers Series 114, William Davidson Institute at the University of Michigan.
    35. José Antonio Ocampo & Juliana Vallejo, 2012. "Economic Growth, Equity and Human Development in Latin America," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 13(1), pages 107-133, February.
    36. J. Mohan Rao, 1998. "Development in the Time of Globalization," Working Papers wp1, Political Economy Research Institute, University of Massachusetts at Amherst.
    37. Djavad Salehi-Isfahani, 2009. "Poverty, inequality, and populist politics in Iran," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 7(1), pages 5-28, March.
    38. Fields, Gary S., 2005. "A welfare economic analysis of labor market policies in the Harris-Todaro model," Journal of Development Economics, Elsevier, vol. 76(1), pages 127-146, February.
    39. Williams, Gavin & Tumusiime-Mutebile, Emmanuel, 1978. "Capitalist and petty commodity production in Nigeria: A note," World Development, Elsevier, vol. 6(9-10), pages 1103-1104.
    40. Ahluwalia, Montek S, 1976. "Income Distribution and Development: Some Stylized Facts," American Economic Review, American Economic Association, vol. 66(2), pages 128-135, May.
    41. Friedrich Schneider & Andreas Buehn & Claudio Montenegro, 2010. "New Estimates for the Shadow Economies all over the World," International Economic Journal, Taylor & Francis Journals, vol. 24(4), pages 443-461.
    42. Amit Basole & Deepankar Basu & Rajesh Bhattacharya, 2015. "Determinants and impacts of subcontracting: evidence from India's unorganized manufacturing sector," International Review of Applied Economics, Taylor & Francis Journals, vol. 29(3), pages 374-402, May.
    43. Gerald Epstein & James Burke, 2001. "Threat Effects and the Internationalization of Production," Working Papers wp15, Political Economy Research Institute, University of Massachusetts at Amherst.
    44. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," World Bank Economic Review, World Bank Group, vol. 10(3), pages 565-591, September.
    45. Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
    46. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    47. Nattrass, Nicoli Jean, 1987. "Street trading in Transkei--a struggle against poverty, persecution, and prosecution," World Development, Elsevier, vol. 15(7), pages 861-875, July.
    48. World Bank, 2015. "World Development Indicators 2015," World Bank Publications, The World Bank, number 21634, November.
    49. repec:cup:apsrev:v:81:y:1987:i:02:p:425-451_19 is not listed on IDEAS
    50. Ozlem Onaran, 2009. "Wage share, globalization and crisis: the case of the manufacturing industry in Korea, Mexico and Turkey," International Review of Applied Economics, Taylor & Francis Journals, vol. 23(2), pages 113-134.
    51. Murray Leibbrandt & Ingrid Woolard & Arden Finn & Jonathan Argent, 2010. "Trends in South African Income Distribution and Poverty since the Fall of Apartheid," OECD Social, Employment and Migration Working Papers 101, OECD Publishing.
    52. Fields, Gary S., 1975. "Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs," Journal of Development Economics, Elsevier, vol. 2(2), pages 165-187, June.
    53. Schultz, T Paul, 1982. "Lifetime Migration within Educational Strata in Venezuela: Estimates of a Logistic Model," Economic Development and Cultural Change, University of Chicago Press, vol. 30(3), pages 559-593, April.
    54. Billor, Nedret & Hadi, Ali S. & Velleman, Paul F., 2000. "BACON: blocked adaptive computationally efficient outlier nominators," Computational Statistics & Data Analysis, Elsevier, vol. 34(3), pages 279-298, September.
    55. World Bank, 2012. "World Development Indicators 2012," World Bank Publications, The World Bank, number 6014, November.
    56. Williamson, Jeffrey G., 1988. "Migration and urbanization," Handbook of Development Economics,in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 11, pages 425-465 Elsevier.
    57. Mwangi wa Githinji & Charalampos Konstantinidis & Andrew Barenberg, 2011. "Small and as Productive : Female Headed Households and the Inverse Relationship between Land Size and Output in Kenya," UMASS Amherst Economics Working Papers 2011-31, University of Massachusetts Amherst, Department of Economics.
    58. Fields, Gary S, 1982. "Place-to-Place Migration in Colombia," Economic Development and Cultural Change, University of Chicago Press, vol. 30(3), pages 539-558, April.
    59. Bourguignon, Francois & Morrisson, Christian, 1998. "Inequality and development: the role of dualism," Journal of Development Economics, Elsevier, vol. 57(2), pages 233-257.
    60. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    61. Mazumdar, Dipak, 1976. "The urban informal sector," World Development, Elsevier, vol. 4(8), pages 655-679, August.
    62. Hymer, Stephen H & Resnick, Stephen, 1969. "A Model of an Agrarian Economy with Nonagricultural Activities," American Economic Review, American Economic Association, vol. 59(4), pages 493-506, Part I Se.
    63. Stanley L. Engerman & Kenneth L. Sokoloff, 2005. "Colonialism, Inequality, and Long-Run Paths of Development," NBER Working Papers 11057, National Bureau of Economic Research, Inc.
    64. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    65. Skott, Peter & Larudee, Mehrene, 1998. "Uneven Development and the Liberalisation of Trade and Capital Flows: The Case of Mexico," Cambridge Journal of Economics, Oxford University Press, vol. 22(3), pages 277-295, May.
    66. Faini, Riccardo, 1996. "Increasing returns, migrations and convergence," Journal of Development Economics, Elsevier, vol. 49(1), pages 121-136, April.
    67. Bowles, Samuel, 1978. "Capitalist development and educational structure," World Development, Elsevier, vol. 6(6), pages 783-796, June.
    68. Jha, Sailesh K., 1996. "The Kuznets curve: A reassessment," World Development, Elsevier, vol. 24(4), pages 773-780, April.
    69. Skott, Peter, 1989. "Effective Demand, Class Struggle and Cyclical Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(1), pages 231-247, February.
    70. Milanovic, Branko & DEC, 1994. "Determinants of cross-country income inequality : an augmented Kuznets hypothesis," Policy Research Working Paper Series 1246, The World Bank.
    71. Cornia, Giovanni Andrea, 1985. "Farm size, land yields and the agricultural production function: An analysis for fifteen developing countries," World Development, Elsevier, vol. 13(4), pages 513-534, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. de Souza, Joao Paulo A., 2014. "Growth Complementarity Between Agriculture and Industry: Evidence from a Panel of Developing Countries," UMASS Amherst Economics Working Papers 2014-11, University of Massachusetts Amherst, Department of Economics.
    2. Frick, Susanne A. & Rodríguez-Pose, Andrés, 2018. "Change in urban concentration and economic growth," World Development, Elsevier, vol. 105(C), pages 156-170.
    3. Oyvat, Cem & wa Gĩthĩnji, Mwangi, 2017. "Migration in Kenya: beyond Harris-Todaro," Greenwich Papers in Political Economy 16226, University of Greenwich, Greenwich Political Economy Research Centre.
    4. Mikulas Pichanic & Anna Stankova, 2017. "The Czech Government?s Strategy for Fighting Inequality," Proceedings of Economics and Finance Conferences 4507375, International Institute of Social and Economic Sciences.

    More about this item

    Keywords

    Distribution; Urbanization; Informality; Economic development;

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gpe:wpaper:15005. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nadine Edwards). General contact details of provider: http://edirc.repec.org/data/pegreuk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.