Gains and losses: Does farmland expropriation harm farmers welfare?

Based on the data of China Household Income Project 2013(CHIP 2013), this paper empirically studies the impact of land expropriation on the objective and subjective welfare of farmers and explores its influence mechanisms. We firstly estimate the net effect of land expropriation on land-lost farmers individual income and happiness. The result shows that although the land expropriation improves their individual income, it significantly reduces their happiness scores. After we use another dataset CFPS2010 to solve endogeneity of geographical selection and apply propensity score matching (PSM) method to solve self-selection bias, the results are also robust. Then, the mechanism analysis shows that off-farm employment plays a mediation effect role so that land expropriation promotes rural labor transfer to non-agricultural employment market and increase their income, but higher occupation switching costs and the lack of social security is one of the important reasons resulting in the decrease of the landless farmers' happiness. To trace the institutional reason, China s splitted land system and its characteristic land expropriation compensation system not only deprived of farmers' land value-added income opportunities, but also failed to fully consider the occupational transformation and long-term security of landless farmers. Acknowledgement : The main funding source for the research is the National Natural Science Foundation of China(71673241).Thanks to Prof. Lu Ming for giving us advice during the research.

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 Record created 2018-10-02, last modified 2020-10-28

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