How Does Migrant Workers’ Return Affect Land Transfer Prices? An Investigation Based on Factor Supply–Demand Theory

Mengfei Gao, Rui Pan and Yueqing Ji ()
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Mengfei Gao: College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, China
Rui Pan: College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, China
Yueqing Ji: College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, China

Land, 2025, vol. 14, issue 8, 1-27

Abstract: Given the significant shifts in rural labor mobility patterns and their continuous influence on the transformation of the land factor market, it is crucial to understand the relationship between labor factor prices and land factor prices. This understanding is essential to keep land factor prices within a reasonable range. This study establishes a theoretical framework to investigate how migrant workers’ return shapes land price formation mechanisms. Using 2023 micro-level survey data from eight counties in Jiangsu Province, China, this study empirically examines how migrant workers’ return affects land transfer prices and its underlying mechanisms through OLS regression and instrumental variable approaches. The findings show that under the current pattern of labor mobility, the outflow factor alone is no longer sufficient to exert substantial downward pressure on land transfer prices. Instead, the localized return of labor has emerged as a key driver behind the rise in land transfer prices. This upward mechanism is primarily realized through the following pathways. First, factor substitution effect: this effect lowers labor prices and increases the relative marginal output value of land factors. Second, supply–demand effect: migrant workers’ return simultaneously increases land demand and reduces supply, intensifying market shortages and driving up transfer prices. Lastly, the results demonstrate that enhancing the stability of land tenure security or increasing local non-agricultural employment opportunities can mitigate the effect of rising land transfer prices caused by the migrant workers’ return. According to the study’s findings, stabilizing land factor prices depends on full non-agricultural employment for migrant workers. This underscores the significance of policies that encourage employment for returning rural labor.

Keywords: migrant workers’ return; land supply; land demand; labor factor price; land transfer price (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2025
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