Village political economy, land tenure insecurity and the rural to urban migration decision: evidence from China

John T. Giles, World Bank Group
Ren Mu, Texas A&M University

This paper investigates the impact of land tenure insecurity on farmers’ labor migration decisions in rural China. Crucial for our identification is that the heterogeneity of patrilineal clans within a village is associated with the cost of reallocating land. We show that the probability of a village-wide reallocation is a function of exogenously determined election timing interacted with the share of households in a village belonging to the largest lineage group in the first year of a panel survey. This interaction is used to identify the effect of land tenure insecurity on migration decisions. We find that in response to a higher probability of village-wide land reallocation, farmers reduce their migration probability by 2.1%, which accounts for 14% of the annual migration rate during this period. This finding attests to the importance of secure property rights in facilitating labor market integration and urbanization in general.