Farmland Transfer and Income Distribution Effect of Heterogeneous Farmers with Livelihood Capital: Evidence from CFPS

Farmland transfer is a crucial aspect of modernizing China's agriculture, which has a significant impact on farmers' income distribution. With rapid urbanization, farmers' livelihood has changed significantly, and the income effects of farmland transfer will differ among heterogeneous farmers. Based on the China Family Panel Studies (CFPS) data, this study examines the impact of farmland transfer on farmers' income growth and income disparity, as well as the income differences in farmland transfer among farmers with different types of livelihood capital. An endogenous switching regression model and unconditional quantile treatment effects are used to correct the selection bias and farmer heterogeneity. The results show that (1) farmland transfer increases farmers' income. Specifically, farmland transfer-in increases farmers' income by 21.15%, while transfer-out increases it by 43.33%. (2) The impact of farmland transfer on farmers' income has a "Matthew effect" and will widen the income gap between farmers. (3) Moreover, farmland transfer exhibits diverse income effects on heterogeneous farmers with livelihood capital. Capital-rich farmers experience the largest income-growth effect from farmland transfer-in, while capital-balanced farmers experience the largest income-growth effect from farmland transfer-out. The policy implications are to further improve the farmland transfer market and enable low-income farmers to participate by improving their qualifications and abilities.