Regression and Matching Estimates of the Effects of the Land Certification Program on Rural Household Income in China

Abstract

Despite the steady growth of China’s economic since the economic reforms in 1978, the rural-urban income inequality has also risen rapidly. Here we explore the role that rural land reform plays in raising income. We investigate growth in rural household income which can be attributed to a Rural Land Registration and Certification (RLRC) program that was put into effect in Chengdu city, Sichuan province in 2009. We draw on household socio-economic data collected in 2011 through a purpose designed survey for the analysis. Using regression and matching methods, we find that the RLRC program has contributed to certified farmers’ participation in land market, especially rental transfer of land to more productive producers. Findings for the program’s impact on increasing farmers’ income are mixed. Although transfer income from land rentals and government subsidies has greatly increased, farming income and wage income have not significantly improved, suggesting that land certification may have had a substitution effect and an income effect on household’s choice between farm, wage employment and leisure. DOI: 10.5901/ajis.2013.v2n8p350