Property rights reforms and local economic development: Evidence from Mexico
Alain de Janvry, Marco Gonzalez-Navarro, Matthew Pecenco, Elisabeth Sadoulety
A recent literature explores the effects of rural land titling programs on labor reallocation. Yet, we have little evidence on the second-order effects titling programs can have on the nonagricultural sector for both local areas and surrounding cities. This paper fills that gap by using the rollout of the Mexican land title program Procede together with restricted-access data on non-agricultural firms. We employ a panel fixed effects research design to control for the nonrandom rollout of the program. Our preliminary results suggest that outmigration, as opposed to increased local labor supply or income effects, from rural areas is the likely dominating force with total wages and the number of large firms decreasing. The results of the land reform are heterogeneous areas favorable to agriculture have differentially more firms, driven primarily by small-scale manufacturing, but lower wages. Further iterations of this paper will include analysis on cities and agricultural production.
Event: Land Governance in an Interconnected World_Annual World Bank Conference on Land and Poverty_2018
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