Submissions Accepted for Presentation at the World Bank Land Conference 2024

Using the universe of land records from a large state in India, we document three empirical facts on rural land holding inequality at the village-level: 1) inequality is higher close to urban areas and decreases with distance, 2) this is due to fewer medium-sized farms (i.e. more small and large farms near urban areas), and 3) the distance to urban area-land holding inequality relationship depends on the size of the urban area - larger the urban area, greater the inequality close to such towns. A parsimonious model where individual farmers face a U-shaped agriculture production function between land size and farm productivity, bequest considerations of their land among their children, and a significant urban opportunity cost of farm production, explains these patterns.

Financial development has proved to promote China's rural transformation. This paper uses the staggered difference-in-difference approach to investigate the impact of the Postal Saving Bank of China reforms in rural areas on agricultural labor productivity (ALP) across 1474 counties in China for the 1993-2016 period. We addressed the potential econometric issues, such as the sample selection bias, the negative weight problem and the potential reverse causality. The results show that increasing the banking penetration by establishing new branches in rural China did not significantly improve the county-level ALP, while financial institutions engaging in credit services could. On average, financial institutions engaging in lending activities contributes to a 1.69% increase in ALP through 0.63% increase of capital deepening and 1% increase of ALP. Finally, we also find that financial development is likely to increase the efficiency of physical capital investment but to decrease the efficiency of land use.

Do rural-urban highways increase land inequality in villages? Theory suggests that, with

credit market imperfections, lower trade costs can increase land inequality through increasing returns technology adoption. Using data on household land ownership in rural India, we provide the first evidence on this issue. Identification exploits the distance of a district to the Golden Quadrilateral network (inconsequential place) and the length of colonial railroad in the 1880s in a district. A 10 percent increase in market access of a district increases land Gini by 2.5 percent, share of landless households by 6.8 percent, and adoption of increasing-returns farming technology by 3.5 percent.

A number of recent papers have found impressive, positive effects of the global Green Revolution on agricultural productivity and measures of economic growth. Yet Indian economists writing in the 1970s and 1980s worried that the Green Revolution may have increased rural inequality. Working with nationally representative datasets that span the Green Revolution in India, we find that the roll-out of high-yielding crop varieties (mostly rice and wheat) seems to have increased land inequality in India, as well as inequality in rural income and rural, female educational attainment. We are also exploring the mechanisms behind these distributional impacts.