Effects of the agrarian reform on human capital
| Areas | : | Education and learning |
|---|---|---|
| Researcher/s in charge | : | Ricardo Fort |
| Other researchers | : | Mauricio Espinoza |
| Execution time | : | November 2019 |
Presentation
The early establishment and persistence of landholding inequality are linked to poor long-run development outcomes. One crucial channel runs through human capital: large landowners historically underinvested in public goods such as schools, restricted workers and their children from attending school, and extracted surplus from laborers that could have been invested in human capital. By equalizing landholdings, land redistribution should facilitate human capital accumulation.
Using original data on land reform across Peru in the 1970s paired with household surveys and the Difference and Difference Method, the research team conducted an age cohort analysis and instead found that higher exposure to land reform negatively impacts educational attainment as measured by the number of years of school attended. The driving mechanisms appear to be an economic opportunity as well as income and child labor: individuals exposed to land reform are more likely to remain in rural areas and to have their children contribute labor to agriculture, driving down income in the long term.
The results show the limitations of land reform as a direct path for human capital development. However, public policy interventions are suggested, such as carrying out land reforms with conditional cash transfers or rural education initiatives that could help to improve these limitations.
