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Rural Property Rights, Migration, and Welfare in Developing Countries

Author

Listed:
  • Pi Jiancai

    (Department of Economics, Nanjing University, 22 Hankou Road Nanjing 210093, P. R. China)

  • Zhou Yu

    (Department of Economics, Nanjing University, 22 Hankou Road Nanjing 210093, P. R. China)

Abstract

Two-sector general equilibrium models are built to investigate how the quality of rural property rights influences rural-urban migration and national welfare in developing countries. In the basic model where the urban wage rate is exogenously given, the impacts of strengthened rural property rights on rural-urban migration and national welfare are determined by comparisons of the rent-gaining effect and the productivity-enhancing effect. Specifically, if the rent-gaining effect dominates the productivity-enhancing effect, strengthened rural property rights will increase the number of rural-urban migrants and reduce national welfare. Otherwise, the opposite impacts are exerted if the productivity-enhancing effect dominates the rent-gaining effect. When we extend the basic model by considering the endogenously determined urban minimum wage rate, the urban minimum wage determination mechanism is also of great importance in determining the outcomes of the basic model. When we extend the basic model by introducing an urban informal sector, the value of labor’s marginal product of the urban informal sector also plays a role in determining the impact of strengthened rural property rights on national welfare. In addition, urban unemployment is also taken into account by the basic and extended models.

Suggested Citation

  • Pi Jiancai & Zhou Yu, 2015. "Rural Property Rights, Migration, and Welfare in Developing Countries," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(3), pages 997-1029, July.
    • Handle: RePEc:bpj:bejeap:v:15:y:2015:i:3:p:997-1029:n:7
    DOI: 10.1515/bejeap-2014-0062
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    More about this item

    Keywords

    rural property rights; rural-urban migration; national welfare; urban unemployment; developing countries;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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