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

22 Pages Posted: 6 Sep 2017

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: October 2017

Abstract

We analyse the effects of land market restrictions on the rural labour market outcomes for women. The existing literature emphasizes two mechanisms through which land restrictions can affect economic outcomes: collateral value of land, and (in)security of property rights. Our analysis focuses on an alternative mechanism where land restrictions increase costs of migration out of villages. Testable prediction of collateral channel is that wages remain unchanged, but the effects on labour force participation are ambiguous. Insecurity of property rights in land reduces labour force participation, but leaves wages undisturbed. In contrast, if land restrictions work primarily through higher migration costs, labour force participation increases, while wages decline. For identification, we exploit a natural experiment in Sri Lanka where historical malaria played a unique role in land policy. We provide robust evidence of a positive effect of land restrictions on women's labour force participation, but a negative effect on female wages. The empirical results thus contradict a collateral or insecure property rights effect, but supports migration costs as the primary mechanism.

Suggested Citation

Emran, M. Shahe and Shilpi, Forhad, Land Market Restrictions, Women's Labour Force Participation and Wages in a Rural Economy (October 2017). Oxford Bulletin of Economics and Statistics, Vol. 79, Issue 5, pp. 747-768, 2017. Available at SSRN: https://ssrn.com/abstract=3032796 or http://dx.doi.org/10.1111/obes.12159

M. Shahe Emran (Contact Author)

George Washington University - Department of Economics ( email )

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302 Monroe Hall
Washington, DC 20052
United States

Forhad Shilpi

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

1818 H. Street, N.W.
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Washington, DC 20433
United States
202-458-7476 (Phone)
202-522-1151 (Fax)

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