Does land expropriation to neighbors affect the enrollment of bystanders in pension programs?

Abstract

Land expropriation can incur not only economic costs but also political costs. Using panel data from the China Family Panel Studies (CFPS), we investigate the impact of land expropriation on the compliance behaviors of rural residents for the New Rural Pension Scheme (NRPS), which is an extremely important public policy led by the government in China. To exclude the potential confounding impacts of reduced social security levels resulting from land expropriation, we focus on farmers in the same village who have not suffered land expropriation. The results of the difference-in-differences (DID) regression model suggest that land expropriation significantly reduces the probability of farmers within the same village, who have not suffered land expropriation, enrolling in the NRPS. The primary reasons are that land expropriation significantly decreases the trust of non-land expropriated farmers in local officials and the NRPS. Additionally, land expropriation has a stronger impact on unexpropriated farmers with lower levels of education, as well as unexpropriated households without Communist Party of China membership or with a high level of dependence on agriculture. Our findings suggest the cost of land expropriation is larger than previously thought, as it generates broader political trust and policy compliance issues.