Absentee Landlords and Land Tenancy

Annemie Maertens, Siddharth Sharma and Melanie Khamis

No 10865, Policy Research Working Paper Series from The World Bank

Abstract: Internal migration and structural transformation are strongly interrelated. This paper uses Indian data spanning 2001–13 to examine a little-known aspect of this relationship: how migration affects agricultural land rental contracts. Building on anecdotal evidence and theory, the paper hypothesizes that as landlords migrate away, their choice of contract for tenant-cultivators changes from sharecropping to fixed rent. Using a shift-share instrument that exploits information on bilateral migration flows between districts, the paper shows that migration increased fixed rent tenancy and contract formalization. Given the continued importance of agricultural land rental markets, these findings have significant implications for rural efficiency and equity in developing countries.

Date: 2024-08-12
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