Do Limitations in Land Rights Transferability Influence Low Mobility Rates in Ethiopia?

Migration is considered a pathway out of poverty for many rural households in developing countries. National policies can discourage households from exploiting external employment opportunities through the distortion of capital markets. Studies in China show that the presence of state and collectively owned land creates inefficiencies in the labor market. We examine the extent restrictions on land rights impede mobility in Ethiopia, having the lowest urbanization rate in sub-Saharan Africa. The empirical estimates support a robust positive effect from increasing the transferability of land rights on migration. Our findings are suggestive that the nascent land certification and registration programs in regions of Ethiopia may potentially promote poverty reduction by increasing incentives to migrate. JEL Classification: O15, Q15, R23