Land Market Restrictions, Women's Labor Force Participation, and Wages in a Rural Economy

42 Pages Posted: 20 Apr 2016 Last revised: 27 Apr 2018

See all articles by M. Shahe Emran

M. Shahe Emran

George Washington University - Department of Economics

Forhad Shilpi

World Bank - Development Research Group (DECRG)

Date Written: December 22, 2015

Abstract

This paper analyzes the effects of land market restrictions on the rural labor market outcomes for women. The existing literature emphasizes two mechanisms through which land restrictions can affect the economic outcomes: the collateral value of land, and (in) security of property rights. Analysis of this paper focuses on an alternative mechanism where land restrictions increase costs of migration out of villages. The testable prediction of collateral effect is that both wages and labor force participation move in the same direction, and insecurity of property rights reduces labor force participation and increases wages. In contrast, if land restrictions work primarily through higher migration costs, labor force participation increases, while wages decline. For identification, this paper exploits a natural experiment in Sri Lanka where historical malaria played a unique role in land policy. This paper provides robust evidence of a positive effect of land restrictions on women's labor force participation, but a negative effect on female wages. The empirical results thus contradict a collateral or insecure property rights effect, but support migration costs as the primary mechanism.

Keywords: Communicable Diseases, Cholera, Leprosy, Malaria, Labor Markets, Rural Labor Markets, Regulatory Regimes, Legislation, Legal Reform, Judicial System Reform, Social Policy, Common Property Resource Development, Legal Products, Educational Sciences

Suggested Citation

Emran, M. Shahe and Shilpi, Forhad, Land Market Restrictions, Women's Labor Force Participation, and Wages in a Rural Economy (December 22, 2015). World Bank Policy Research Working Paper No. 7524. Available at SSRN: https://ssrn.com/abstract=2707855

M. Shahe Emran (Contact Author)

George Washington University - Department of Economics ( email )

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Forhad Shilpi

World Bank - Development Research Group (DECRG) ( email )

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