Property Rights, Labor Markets, and Efficiency in a Transition Economy: The Case of Rural China

Dwayne Benjamin () and Loren Brandt ()

Working Papers from University of Toronto, Department of Economics

Abstract: This paper investigates the consequences of imperfect and uneven factor market development for farm efficiency in rural China. In particular, we estimate the extent to which an inverse relationship in farm productivity can be attributed to the administrative (instead of market) allocation of land, and the extent of unevenly developed non-agricultural opportunities. Using a recently collected household survey, we show that a considerable amount of inefficiency exists in the countryside, especially in the employment of labor. Our results show that this inefficiency is alleviated by the development of external labor markets, but perhaps more surprisingly, that in the context of the current imperfect market environment, administrative reallocations help improve both efficiency and equity on the margin. They do not go far enough, however, which raises important questions about constraints on rental activity and the link between administrative reallocation and decentralized land exchange.

JEL-codes: D23 J43 Q15 O12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-dev, nep-eff and nep-lab
Date: 2000-04-11
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Related works:
Working Paper: Property Rights, Labour Markets, and Efficiency in a Transition Economy: The Case of Rural China (2002)
Journal Article: Property rights, labour markets, and efficiency in a transition economy: the case of rural China (2002)
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Persistent link: http://EconPapers.repec.org/RePEc:tor:tecipa:benjamin-00-02

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