Industrialisation-led displacement and long-term welfare: evidence from West Bengal

Abstract This study identifies whether people evicted for industrialisation purposes are worse-off in the long-run. The study focuses on the establishment of the Falta special economic zone in 1984 in West Bengal, India. Using household survey data, the results indicate that the displaced are not worse-off three decades after their displacement and resettlement. There is, however, some evidence that the displaced did not receive adequate land compensation or property rights on their new land and dwellings. There is also evidence that cash compensation policies were skewed, to the disadvantage of large landowners. We also identify three factors which possibly led to resilience among the displaced households: the creation of employment opportunities at the industrial park, gradual erosion of the gender gap in education and labour market participation, and large(r) household size. Overall, we do not find that the adverse effects of displacement and inadequate compensation persist in the long run.