The Effects of Land Redistribution on Agricultural Development: Evidence from Colonial and South Korea

Abstract

Applying difference-in-differences method to a county-level panel dataset comprising colonial and South Korea, this study finds that the post-colonial land redistribution lowered the level of total factor productivity by disrupting the efficient allocation of farmland across cultivators varying in skill. The equality shock ended cost sharing between tenants and landlords, tightening financial constraints for the post-1945 farmers, which reduced the use of chemical fertilizer and draught animals. Lastly, the disappearance of sharecropping contract increased the use of organic fertilizers indicating the rise in work intensity due to the removal of Marshallian inefficiency.

Keywords: tenancy farming, land reform, land yield, total factor productivity, Korea

JEL Classification: N55, O13, O53, Q15