Rural Property Rights, Migration, and Welfare in Developing Countries

Jiancai Pi and Zhou Yu ()
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Zhou Yu: Department of Economics, Nanjing University, 22 Hankou Road Nanjing 210093, P. R. China

The B.E. Journal of Economic Analysis & Policy, 2015, vol. 15, issue 3, 997-1029

Abstract: Two-sector general equilibrium models are built to investigate how the quality of rural property rights influences rural-urban migration and national welfare in developing countries. In the basic model where the urban wage rate is exogenously given, the impacts of strengthened rural property rights on rural-urban migration and national welfare are determined by comparisons of the rent-gaining effect and the productivity-enhancing effect. Specifically, if the rent-gaining effect dominates the productivity-enhancing effect, strengthened rural property rights will increase the number of rural-urban migrants and reduce national welfare. Otherwise, the opposite impacts are exerted if the productivity-enhancing effect dominates the rent-gaining effect. When we extend the basic model by considering the endogenously determined urban minimum wage rate, the urban minimum wage determination mechanism is also of great importance in determining the outcomes of the basic model. When we extend the basic model by introducing an urban informal sector, the value of labor’s marginal product of the urban informal sector also plays a role in determining the impact of strengthened rural property rights on national welfare. In addition, urban unemployment is also taken into account by the basic and extended models.

Keywords: rural property rights; rural-urban migration; national welfare; urban unemployment; developing countries (search for similar items in EconPapers)
JEL-codes: O15 P26 R13 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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DOI: 10.1515/bejeap-2014-0062

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