Agricultural productivity and land inequality. Evidence from the Philippines

This paper presents the first detailed empirical evaluation of the effect of agricultural productivity on land inequality using the context of genetically modified (GM) corn seeds introduction in the Philippines. Using three waves of census data covering 21 years and 17 million plots, I identify the effect by exploiting exogenous variations in soil and weather, leading to differences in potential gain from GM corn cultivation. Results show that municipalities that benefited more from the technology experienced an increase in landholding inequality, measured by the area farmed by top decile and by the Gini index. This effect is partly driven by a relative increase in agricultural land and more precisely by a lower contraction in more affected areas. While increased land inequality is associated with a higher level of terrorist activity, it does not seem to have any adverse effect on poverty, household income or expenditure.