Land Reform and Human Capital Development: Evidence from Peru

• In Event: Politics of Land Reforms and Agrarian Change

Abstract

The early establishment and persistence of landholding inequality has long been 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 the ability of workers and their children to attend school, and extracted surplus from laborers that could have been used to invest 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, we conduct an age cohort analysis and find instead that higher exposure to land reform negatively impacted educational attainment as measured by the number of years of school attended. The driving mechanisms appears to be rural stasis 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. The findings suggest limitations to equity-enhancing land reform

Author

• Michael Albertus, University of Chicago