Off-farm labor markets and the emergence of land rental markets in rural China

A nascent land rental market is emerging in rural China after almost two decades of rural reforms. That the timing of its emergence coincides with the acceleration of an off-farm labor market suggests that the development of one factor market may have induced the emergence of the other. Using a recent farm survey, we are able to show that households with active participation in off-farm labor markets, measured by the number of days worked, have indeed rented less land. Contrarily, our analysis fails to substantiate the hypotheses that administrative land reallocations, which is a property of China's land tenure system, and respectively grain quotas, tend to hamper the development of land rental transactions. J. Comp. Econ., June 2002, 30(2), pp. 395–414. Division of Social Science, Hong Kong University of Science and Technology, Clearwater Bay, Kowloon, Hong Kong, China. © 2002 Association for Comparative Economic Studies. Published by Elsevier Science (USA). All rights reserved. Journal of Economic Literature Classification Numbers: J22, J43, O12, O53, P23, P36.

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