Land Property Rights, Social Trust, and Non-Agricultural Employment: An Interactive Study of Formal and Informal Institutions in China

Abstract

Based on China’s structural transformation and the resulting rural social institutional changes, this paper clarifies how land certification affects non-agricultural employment, introducing trust culture as an informal institution and constructing a theoretical framework for their interactive effect on non-agricultural employment. Using data from the China Rural Household Panel Survey, the empirical research finds that land certification increases the likelihood of rural labor engaging in non-agricultural employment by reducing the risks of land loss, promoting land transfers, and facilitating credit financing. The interaction between land certification and social trust shows that increased social trust weakens the positive impact of land certification on non-agricultural employment.