Agrarian Structures, Urbanization, and Inequality

Cem Oyvat

No 15005, Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre

Abstract: This study examines the impact of agrarian structures on income inequality over the long run. First, it exhibits the relationship between land and income distribution by developing a theoretical model based on Harris and Todaro (1970) and Lewis (1954). High land inequality increases income Gini coefficients in the urban sector as well as the rural sector, not only by creating congestion in the urban subsistence sector, but also by feeding the growth of the urban reserve army of labor, which pulls down the wages in the urban capitalist sector. Next, the study investigates the empirical relationship between land inequality, level of urbanization and income inequality using cross country datasets. The estimation results support the theoretical model and indicate that the level of land inequality has a significant impact on determining the level of urbanization, and urban and overall income inequalities. Moreover, the analysis finds that overurbanization increases income inequality. The empirical analysis controls for institutional factors like education inequality and the level of democracy. The results present a stronger evidence on the land inequality’s influence through urbanization than through education and democracy. These results suggest that policymakers should have a broader view as to the importance of agrarian policies. A progressive land reform or/and subsidies protecting small peasantry can also reduce urban income inequality and poverty over the long run.

Keywords: Distribution; Urbanization; Informality; Economic development (search for similar items in EconPapers)
Date: 2016-02-02
References: Add references at CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://gala.gre.ac.uk/id/eprint/15005/8/15005%20OY ... _Structures_2016.pdf
Our link check indicates that this URL is bad, the error code is: 401 Unauthorized (http://gala.gre.ac.uk/id/eprint/15005/8/15005%20OYVAT_Agrarian_Structures_2016.pdf [301 Moved Permanently]--> https://gala.gre.ac.uk/id/eprint/15005/8/15005%20OYVAT_Agrarian_Structures_2016.pdf)

Related works:
Journal Article: Agrarian Structures, Urbanization, and Inequality (2016)
Working Paper: Agrarian Structures, Urbanization and Inequality (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gpe:wpaper:15005

Access Statistics for this paper

More papers in Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre Contact information at EDIRC.
Bibliographic data for series maintained by Nadine Edwards ().