Resource information
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 recognition of 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.
