Do Land Market Restrictions Hinder Structural Change in a Rural Economy? : Evidence from Sri Lanka
This paper analyzes the effects of land market restrictions on structural change from agriculture to non-farm in a rural economy. This paper develops a theoretical model that focuses on higher migration costs due to restrictions on alienability, an...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2015/12/25713612/land-market-restrictions-hinder-structural-change-rural-economy-evidence-sri-lanka http://hdl.handle.net/10986/23625 |
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okr-10986-236252021-04-23T14:04:16Z Do Land Market Restrictions Hinder Structural Change in a Rural Economy? : Evidence from Sri Lanka Emran, M. Shahe Shilpi, Forhad J. Shilpi, Forhad SELF EMPLOYED EMPLOYMENT SOCIAL COSTS RIGHTS MOTIVATION ECONOMIC GROWTH PRODUCTION UTILITY FUNCTIONS CURRENT LABOR FORCE STRUCTURAL CHANGE INCOME AGRICULTURAL PRODUCTION LABOR ALLOCATION MARGINAL COST INTEREST RATE PROPERTY RIGHTS AGRICULTURAL DEVELOPMENT ELASTICITY OF DEMAND INFORMATION LABOR FORCE PRODUCTION INCREASES ELASTICITY POLITICAL ECONOMY ENGEL CURVE EFFECTS INCENTIVES HEALTH EQUILIBRIUM AGRICULTURAL ECONOMICS VARIABLES RURAL LABOR MODELS PRIVATE PROPERTY LABOR FORCE PARTICIPATION MOBILITY OF LABOR AGRICULTURAL OUTPUT FERTILIZERS PRODUCTION PROCESS KNOWLEDGE EMPIRICAL ANALYSIS DEVELOPMENT INELASTIC DEMAND PRESENT VALUE CHOICE LABOR MARKET COSTS DEVELOPMENT ECONOMICS POPULATION GROWTH RENT DATA QUALITY PRODUCTS PRODUCTIVITY ECONOMETRICS LABOR PRODUCTIVITY OPTIONS ECONOMETRIC MODELS CRITERIA MARKETING MARKETS SMALLHOLDER AGRICULTURE ORGANIZATIONS RESEARCH HISTORY LABOR FARMERS CONSUMER CHOICE UTILITY LAND DEVELOPMENT MORTALITY CROPS FOOD PRODUCTION FEMALE LABOR LAND USE UNEMPLOYMENT PRODUCTIVITY GROWTH CONSUMPTION GENERAL EQUILIBRIUM HUMAN CAPITAL CAPITAL WAGES POLICIES VALUES DUAL ECONOMY LABOR DEMAND FAMILY VALUE GENDER PRODUCTION FUNCTIONS CREDIT DIVISION OF LABOR DEMAND UTILITY FUNCTION ECONOMY AGRICULTURE PROPERTY PRIVATE SECTOR MEASUREMENT TRANSACTION COSTS ENVIRONMENT LABOR MOBILITY CONCEPTUAL FRAMEWORK ECONOMICS TERMS OF TRADE EQUILIBRIUM WAGES ECONOMIC DEVELOPMENT TRADE GOODS LAND LAND PRODUCTIVITY THEORY SECURITY EDUCATION INVESTMENT MARKET EQUILIBRIUM FEMALE LABOR FORCE INCOME ELASTICITY OF DEMAND LABORERS ECONOMIC PROGRESS SUPPLY EMPIRICAL EVIDENCE LABOR SUPPLY LAW EQUILIBRIUM PRICES BORROWING WOMEN AGRICULTURAL INHERITANCE ARBITRAGE LABOR MARKETS OUTCOMES RURAL DEVELOPMENT ADVERSE EFFECTS PRICES LABOR REGULATIONS POVERTY ALLEVIATION DEVELOPMENT POLICY PUBLIC GOODS This paper analyzes the effects of land market restrictions on structural change from agriculture to non-farm in a rural economy. This paper develops a theoretical model that focuses on higher migration costs due to restrictions on alienability, and identifies the possibility of a reverse structural change where the share of nonagricultural employment declines. The reverse structural change can occur under plausible conditions: if demand for the non-agricultural good is income-inelastic (assuming the non-farm good is non-tradable), or non-agriculture is less labor intensive relative to agriculture (assuming the non-farm good is tradable). For identification, this paper exploits a natural experiment in Sri Lanka where historical malaria played a unique role in land policy. The empirical evidence indicates significant adverse effects of land restrictions on manufacturing and services employment, rural wages, and per capita household consumption. The evidence on the disaggregated occupational choices suggests that land restrictions increase wage employment in agriculture, but reduce it in manufacturing and services, with no perceptible effects on self-employment in non-agriculture. The results are consistent with the migration costs model, but contradict two widely discussed alternative mechanisms: collateral effect and property rights insecurity. This paper also provides direct evidence in favor of the migration costs mechanism. 2016-01-12T21:53:42Z 2016-01-12T21:53:42Z 2015-12 Working Paper http://documents.worldbank.org/curated/en/2015/12/25713612/land-market-restrictions-hinder-structural-change-rural-economy-evidence-sri-lanka http://hdl.handle.net/10986/23625 English en_US Policy Research Working Paper;No. 7525 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research South Asia Sri Lanka |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
SELF EMPLOYED EMPLOYMENT SOCIAL COSTS RIGHTS MOTIVATION ECONOMIC GROWTH PRODUCTION UTILITY FUNCTIONS CURRENT LABOR FORCE STRUCTURAL CHANGE INCOME AGRICULTURAL PRODUCTION LABOR ALLOCATION MARGINAL COST INTEREST RATE PROPERTY RIGHTS AGRICULTURAL DEVELOPMENT ELASTICITY OF DEMAND INFORMATION LABOR FORCE PRODUCTION INCREASES ELASTICITY POLITICAL ECONOMY ENGEL CURVE EFFECTS INCENTIVES HEALTH EQUILIBRIUM AGRICULTURAL ECONOMICS VARIABLES RURAL LABOR MODELS PRIVATE PROPERTY LABOR FORCE PARTICIPATION MOBILITY OF LABOR AGRICULTURAL OUTPUT FERTILIZERS PRODUCTION PROCESS KNOWLEDGE EMPIRICAL ANALYSIS DEVELOPMENT INELASTIC DEMAND PRESENT VALUE CHOICE LABOR MARKET COSTS DEVELOPMENT ECONOMICS POPULATION GROWTH RENT DATA QUALITY PRODUCTS PRODUCTIVITY ECONOMETRICS LABOR PRODUCTIVITY OPTIONS ECONOMETRIC MODELS CRITERIA MARKETING MARKETS SMALLHOLDER AGRICULTURE ORGANIZATIONS RESEARCH HISTORY LABOR FARMERS CONSUMER CHOICE UTILITY LAND DEVELOPMENT MORTALITY CROPS FOOD PRODUCTION FEMALE LABOR LAND USE UNEMPLOYMENT PRODUCTIVITY GROWTH CONSUMPTION GENERAL EQUILIBRIUM HUMAN CAPITAL CAPITAL WAGES POLICIES VALUES DUAL ECONOMY LABOR DEMAND FAMILY VALUE GENDER PRODUCTION FUNCTIONS CREDIT DIVISION OF LABOR DEMAND UTILITY FUNCTION ECONOMY AGRICULTURE PROPERTY PRIVATE SECTOR MEASUREMENT TRANSACTION COSTS ENVIRONMENT LABOR MOBILITY CONCEPTUAL FRAMEWORK ECONOMICS TERMS OF TRADE EQUILIBRIUM WAGES ECONOMIC DEVELOPMENT TRADE GOODS LAND LAND PRODUCTIVITY THEORY SECURITY EDUCATION INVESTMENT MARKET EQUILIBRIUM FEMALE LABOR FORCE INCOME ELASTICITY OF DEMAND LABORERS ECONOMIC PROGRESS SUPPLY EMPIRICAL EVIDENCE LABOR SUPPLY LAW EQUILIBRIUM PRICES BORROWING WOMEN AGRICULTURAL INHERITANCE ARBITRAGE LABOR MARKETS OUTCOMES RURAL DEVELOPMENT ADVERSE EFFECTS PRICES LABOR REGULATIONS POVERTY ALLEVIATION DEVELOPMENT POLICY PUBLIC GOODS |
| spellingShingle |
SELF EMPLOYED EMPLOYMENT SOCIAL COSTS RIGHTS MOTIVATION ECONOMIC GROWTH PRODUCTION UTILITY FUNCTIONS CURRENT LABOR FORCE STRUCTURAL CHANGE INCOME AGRICULTURAL PRODUCTION LABOR ALLOCATION MARGINAL COST INTEREST RATE PROPERTY RIGHTS AGRICULTURAL DEVELOPMENT ELASTICITY OF DEMAND INFORMATION LABOR FORCE PRODUCTION INCREASES ELASTICITY POLITICAL ECONOMY ENGEL CURVE EFFECTS INCENTIVES HEALTH EQUILIBRIUM AGRICULTURAL ECONOMICS VARIABLES RURAL LABOR MODELS PRIVATE PROPERTY LABOR FORCE PARTICIPATION MOBILITY OF LABOR AGRICULTURAL OUTPUT FERTILIZERS PRODUCTION PROCESS KNOWLEDGE EMPIRICAL ANALYSIS DEVELOPMENT INELASTIC DEMAND PRESENT VALUE CHOICE LABOR MARKET COSTS DEVELOPMENT ECONOMICS POPULATION GROWTH RENT DATA QUALITY PRODUCTS PRODUCTIVITY ECONOMETRICS LABOR PRODUCTIVITY OPTIONS ECONOMETRIC MODELS CRITERIA MARKETING MARKETS SMALLHOLDER AGRICULTURE ORGANIZATIONS RESEARCH HISTORY LABOR FARMERS CONSUMER CHOICE UTILITY LAND DEVELOPMENT MORTALITY CROPS FOOD PRODUCTION FEMALE LABOR LAND USE UNEMPLOYMENT PRODUCTIVITY GROWTH CONSUMPTION GENERAL EQUILIBRIUM HUMAN CAPITAL CAPITAL WAGES POLICIES VALUES DUAL ECONOMY LABOR DEMAND FAMILY VALUE GENDER PRODUCTION FUNCTIONS CREDIT DIVISION OF LABOR DEMAND UTILITY FUNCTION ECONOMY AGRICULTURE PROPERTY PRIVATE SECTOR MEASUREMENT TRANSACTION COSTS ENVIRONMENT LABOR MOBILITY CONCEPTUAL FRAMEWORK ECONOMICS TERMS OF TRADE EQUILIBRIUM WAGES ECONOMIC DEVELOPMENT TRADE GOODS LAND LAND PRODUCTIVITY THEORY SECURITY EDUCATION INVESTMENT MARKET EQUILIBRIUM FEMALE LABOR FORCE INCOME ELASTICITY OF DEMAND LABORERS ECONOMIC PROGRESS SUPPLY EMPIRICAL EVIDENCE LABOR SUPPLY LAW EQUILIBRIUM PRICES BORROWING WOMEN AGRICULTURAL INHERITANCE ARBITRAGE LABOR MARKETS OUTCOMES RURAL DEVELOPMENT ADVERSE EFFECTS PRICES LABOR REGULATIONS POVERTY ALLEVIATION DEVELOPMENT POLICY PUBLIC GOODS Emran, M. Shahe Shilpi, Forhad J. Shilpi, Forhad Do Land Market Restrictions Hinder Structural Change in a Rural Economy? : Evidence from Sri Lanka |
| geographic_facet |
South Asia Sri Lanka |
| relation |
Policy Research Working Paper;No. 7525 |
| description |
This paper analyzes the effects of land
market restrictions on structural change from agriculture to
non-farm in a rural economy. This paper develops a
theoretical model that focuses on higher migration costs due
to restrictions on alienability, and identifies the
possibility of a reverse structural change where the share
of nonagricultural employment declines. The reverse
structural change can occur under plausible conditions: if
demand for the non-agricultural good is income-inelastic
(assuming the non-farm good is non-tradable), or
non-agriculture is less labor intensive relative to
agriculture (assuming the non-farm good is tradable). For
identification, this paper exploits a natural experiment in
Sri Lanka where historical malaria played a unique role in
land policy. The empirical evidence indicates significant
adverse effects of land restrictions on manufacturing and
services employment, rural wages, and per capita household
consumption. The evidence on the disaggregated occupational
choices suggests that land restrictions increase wage
employment in agriculture, but reduce it in manufacturing
and services, with no perceptible effects on self-employment
in non-agriculture. The results are consistent with the
migration costs model, but contradict two widely discussed
alternative mechanisms: collateral effect and property
rights insecurity. This paper also provides direct evidence
in favor of the migration costs mechanism. |
| format |
Working Paper |
| author |
Emran, M. Shahe Shilpi, Forhad J. Shilpi, Forhad |
| author_facet |
Emran, M. Shahe Shilpi, Forhad J. Shilpi, Forhad |
| author_sort |
Emran, M. Shahe |
| title |
Do Land Market Restrictions Hinder Structural Change in a Rural Economy? : Evidence from Sri Lanka |
| title_short |
Do Land Market Restrictions Hinder Structural Change in a Rural Economy? : Evidence from Sri Lanka |
| title_full |
Do Land Market Restrictions Hinder Structural Change in a Rural Economy? : Evidence from Sri Lanka |
| title_fullStr |
Do Land Market Restrictions Hinder Structural Change in a Rural Economy? : Evidence from Sri Lanka |
| title_full_unstemmed |
Do Land Market Restrictions Hinder Structural Change in a Rural Economy? : Evidence from Sri Lanka |
| title_sort |
do land market restrictions hinder structural change in a rural economy? : evidence from sri lanka |
| publisher |
World Bank, Washington, DC |
| publishDate |
2016 |
| url |
http://documents.worldbank.org/curated/en/2015/12/25713612/land-market-restrictions-hinder-structural-change-rural-economy-evidence-sri-lanka http://hdl.handle.net/10986/23625 |
| _version_ |
1764454365675913216 |