Three Essays on Land Rights, Labor Mobility and Human Capital Investment in China

Thesis (Ph.D.)--University of Washington, 2013The dissertation explores how institutional features of the Chinese economy impact the welfare and behavior of Chinese households. The first two chapters investigate the economic implications of varying land security in rural China. The third chapter provides an empirical test of household responses to China's One-Child Policy, looking at children's education attainments and subsequent earnings. Chapter one provides both theoretical and empirical models to show that with secured land rights, households with high farming ability are likely to invest in land while households with low farming ability tend to invest in human capital and migrate to the city. The result indicates labor specialization as a result of land security. The results imply that governmental policies promoting land security may facilitate both migration and investment in land. Chapter two examines the role of rural land reallocation on welfare and risk coping strategies. In a closed agricultural economy, large-scale land reallocation help households to cope with labor supply shocks. However, when non-farm labor market and land rental market exist, the proportion of households that benefit from large-scale land adjustments will decrease. Both migration and large-scale reallocation appear to serve as effective strategies to smooth out consumption. Large-scale land reallocation appears to play a bigger role in smoothing consumption than in smoothing income. Chapter three provides an empirical test to evaluate the impacts of the One-Child Policy (OCP) on children's education attainments and subsequent earnings. The baseline identification strategy uses a difference-in-difference approach to compare outcome for children born before and after OCP; it also compares outcomes between treatment and control groups facing different institutional constraints at the same period of time. The study estimates the Local Average Treatment Effect (LATE) for returns to education. Empirical results suggest that OCP has bigger impacts on years of education of urban men compared with urban women. Wage estimations show that one more year of education increases women's hourly wage earnings by 5.6 to 8.1 percentage points but an additional year has no significant impact on the wage of men