Off-farm employments and land rental behavior: evidence from rural China

Abstract

Purpose – The purpose of this paper is to examine the impacts of off-farm labor employments on household land rental behavior in rural China. Design/methodology/approach – IV-Probit and IV-Tobit model are used to identify the estimate of interest. Findings – The results indicate that households with more members participating in either migration or local off-farm work are more/less likely to rent out/in land. Moreover, the effect of migration on household land rental behavior is much larger than the effect of local off-farm work. Practical implications – These results suggest that ensuring benefits of migrants in urban cities can automatically promote household land rental behavior in rural China. Originality/value – The authors provide a rigorous and careful empirical analysis on the effect of off-farm employment on household land rental behavior and pay special attention to the endogeneity issue tackled using separable instruments.