Effects of Confirmation of Homestead Rights and Labor Transfer on Rural Income Inequality in China

This study provides a comprehensive analysis of the confirmation of homestead rights (CHR) in China, filling a gap in the research field of the distribution consequences of China’s homestead policy reform. The main innovation of this study is to demonstrate both theoretically and empirically that the interaction between the CHR and labor transfer shapes a pro-poor outcome. This study constructed a novel binary economic mathematical framework and used intensity-based DID design on unique village household data. It was found that the CHR significantly reduced income inequality, and the transfer of working-age labor force was a powerful multiplier effect. The robustness checks, including RIF regression and PSM-DID, confirmed this causal relationship. In addition, heterogeneity analysis indicates that this impact is strongest in developed eastern regions, and, crucially, strongest in low-income and low dependency ratio households. This emphasizes that the effectiveness of CHR policies is determined by both market maturity and household structure. These findings emphasize the importance of combining land certification with labor mobility policies to achieve equitable development, providing a model worth exploring for resource allocation and institutional design in developing economies.