Land Security and Mobility Frictions.

This article investigates the distinct roles of insecure property rights over farmland and other labor-mobility frictions in shaping labor reallocation from agriculture to nonagriculture and from rural to urban areas in China between 2004 and 2018. Using rich household- and individual-level panel data combined with a structural equilibrium model that endogenously determines family decisions on farm operation and migration, the study finds that land insecurity significantly depresses agricultural productivity and structural transformation by raising the share of rural households operating farms and limiting labor mobility. Quantitatively, the negative effects of land insecurity on agricultural employment and productivity are comparable to those of all other labor-mobility barriers combined. Over the period studied, improvements in land tenure security—linked to institutional reforms—account for the observed reduction in overall labor-mobility frictions, while other migration-related barriers have slightly increased. Extensions of the model incorporating rural nonagricultural sectors, age differences within families, and regional heterogeneity confirm the robustness of these findings and highlight that land insecurity primarily affects household-level decisions, whereas other labor-mobility frictions operate at the individual level. The results underscore the importance of secure land rights in facilitating structural change and suggest that further reductions in non-land-related labor-mobility barriers could yield substantial welfare and productivity gains.