DP20360 Sowing Seeds of Mobility: The Uneven Impact of Land Reform
Mobility barriers hinder structural transformation and economic growth. This paper examines how land market frictions constrain labor mobility. In developing countries, rural households risk losing land if they stop cultivating it. This implicit barrier is made explicit through China’s hukou system. Typically, the wife remains in agriculture while the husband moves to non-agriculture. Using two land reforms that reduce this barrier, we construct a novel county-level reform index and show that these land reforms induce rural women to leave agriculture at higher rates than rural men, while also lowering urban women’s employment and wages relative to urban men. Incorporating this index into a two-sector model with intra-household employment decisions replicates the observed uneven impacts and has significant effects on agricultural productivity.
