General Equilibrium Effects of Land Market Restrictions on Labor Market : Evidence from Wages in Sri Lanka

Taking advantage of a historical quasi-experiment in Sri Lanka, this paper provides evidence on the effects of land market restrictions on wages and its spatial pattern. The empirical specification is derived from a general equilibrium model that predicts that the adverse effects of land market restrictions on wages will be less in remote locations. For identification, the study exploits the effects of historical malaria prevalence on the incidence of land restrictions through its effects on "crown land". During the 16th to early 20th centuries, areas severely affected by malaria were abandoned by households and the land was taken over by the government. These lands that were later distributed through resettlement programs are subject to sales, rental, and mortgage restrictions. The variations in the amount of crown land resulting from different intensity of historical malaria provide a source of exogenous variations in the incidence of land restrictions in a sub-district. The results show that land restrictions reduce wages substantially, and this effect is smaller in remote locations. A 1 percent increase in land restrictions reduces wages by about 6.6 percent at the median travel time from an urban center, and the effect becomes effectively zero after 6 hours of travel time.

Bibliographic Details

Main Authors:	Emran, M. Shahe, Shilpi, Forhad
Language:	English
Published:	2010-10-01
Subjects:	ACCESS TO EDUCATION, AGGLOMERATION ECONOMIES, AGRICULTURAL DEVELOPMENT, AVERAGE TRAVEL TIME, CETERIS PARIBUS, CITIZENS, CULTURAL CHANGE, DEVELOPING COUNTRIES, DRAINAGE, ECONOMIC GROWTH, ECONOMICS, EDUCATIONAL ATTAINMENT, ELASTICITIES, ELASTICITY, EQUITABLE ACCESS, EQUITY IMPACTS, FAMILY MEMBERS, GOVERNMENT POLICIES, HEALTH FACILITIES, HEAVY VEHICLES, HIGHWAY, HIGHWAYS, HOUSEHOLD INCOME, HUMAN CAPITAL, INDUSTRIALIZATION, INFECTION RATES, INFORMATION SYSTEM, INHERITANCE, LABOR FORCE, LABOR MARKET, LABOR MARKETS, LABOR SUPPLY, LAND DEVELOPMENT, LAND MARKETS, LAND PRODUCTIVITY, LAND TENURE, LOCAL ECONOMY, LOW LABOR PRODUCTIVITY, MALARIA, MARITAL STATUS, MIGRATION, MOBILITY, POLICY RESEARCH, POLICY RESEARCH WORKING PAPER, POLICY RESTRICTIONS, POLITICAL ECONOMY, POPULATION GROWTH, PRIMARY SCHOOL, PRIVATE PROPERTY RIGHTS, PRODUCTIVITY, PROGRESS, PROPERTY RIGHTS, PUBLIC HEALTH, PUBLIC SERVICES, RESETTLEMENT, RESPECT, ROAD, ROAD NETWORK, ROADS, ROUTE, RURAL AREAS, RURAL DEVELOPMENT, RURAL POVERTY, SAFETY, SAVINGS, SOCIAL IMPACT, SOCIAL SCIENCE, SOCIAL SERVICES, SPATIAL DISTRIBUTION, SPEEDS, STREETS, TRANSPORT, TRANSPORT ENGINEERING, TRANSPORT INFRASTRUCTURE, TRANSPORTATION, TRANSPORTATION ENGINEERING, TRAVEL SPEED, TRAVEL TIME, TRUCKS, TYPES OF ROADS, UNEMPLOYMENT, URBAN, URBAN CENTER, URBAN CENTERS, URBAN HOUSING, URBAN MIGRATION, VEHICLE, WAR, YOUNG MEN,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101027083834 https://hdl.handle.net/10986/3942
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