Short-term Gains, Long-term Loss: Unintended Effects of China's Land Reform on Education and Labor Market Outcomes

Abstract

China's land reform during 1978 to 1984 has brought about dramatic changes to rural population. This paper presents empirical evidence that the land reform negatively affected human capital investment. Exploiting the county-by-county rollout of the land reform and use the difference-in-difference strategy, we find that the land reform decreases significantly the likelihood of completed high school education among teenagers. We find no similar effects among urban population or for primary and middle school education. We also find that the land reform leads to a lower likelihood of being employed in non-agricultural sector and lower income approximately two decades later.