Economics Brown Bag seminar: Yunyi Jin

Yunyi Jin will give a brown bag seminar in the conference room in Alfa 1.

Title: Long-run distortions in talent allocation from land right insecurity
Coauthors: Yun Xiao & Zichen Deng

Abstract:  Our study examines how insecure land rights distort long-run talent allocation by creating mobility frictions across occupations and locations. We develop a Roy model with overlapping generations and endogenous education. Under the assumption that education complements non-agricultural work more than farming, the model predicts that improved land security would generate larger labor reallocation among the younger generation, who can re-optimize their educational choices, than the current workforce, who can only adjust occupation conditional on fixed educational levels. Exploiting the staggered rollout of China's Rural Land Contracting Law, which strengthened land rights security, we find that rural youths younger than 15 at the time of reform were more likely to attend high school or college and subsequently transition from rural low-skill jobs to higher-skill, higher-income occupations than slightly older cohorts. The educational adjustments are concentrated among children from families with greater comparative advantage in non-agricultural production. The findings are consistent with the model's prediction and confirm that education is the key channel through which land rights insecurity generates persistent misallocation of talent.