Land ownership as an urban employment disincentive for rural migrants in China

Abstract

When landowning rural migrants in urban areas in China become unemployed, they retain the option to return home to agricultural work. As a result, the opportunity cost of the loss of employment for these migrants declines. In addition, the potential wealth arising from compensation for expropriated rural land increases significantly with ongoing urbanization in China. This weakens the incentive for landowning rural migrants to work as hard in urban employment as they might otherwise. In this paper, we employ the Floating Population Dynamic Monitoring Survey for Beijing, Shanghai, and Guangzhou in 2012, as surveyed by the Municipal Population and Family Planning Commission to assess the employment disincentives induced by rural land ownership. We find that compared with landless rural migrants, landowning rural migrants generally have less job stability and lower salaries.