Household-Level Welfare Effects of Land Expropriation : Evidence from China

A number of developing countries use land expropriation policies to expand cities and develop peri-urban areas. In China, an average of 1,600 km2 were expropriated annually from 2004-2018. The impact of this urban development strategy on expropriated households is not well-understood. I estimate the effect of expropriation on Chinese households' welfare, measured by their livelihood choice and earned income. Controlling for baseline outcomes, I find that for the first two years, expropriation reduces household agricultural participation and production but does not increase other income-generating activities. The result is reduced food security and ability to earn income. Compensation paid to households does not fully offset these effects in cases where households lose all their land or are uncompensated. These findings suggest concrete policies governments can implement to lessen the negative impacts of urbanization on expropriated households: greater compensation, development of rural non-agricultural labor markets, and direct food assistance to expropriated households