Abstract: The prevalence of untitled land in poor countries helps explain the agricultural productivity gap between rich and poor countries. Since untitled land cannot be rented or traded across farmers, it creates not only land market misallocation, but also distortions in occupational choice. I build a two-sector general equilibrium model to quantify the impact of untitled land. My results indicate that larger shares of untitled land lower agricultural productivity. If 80% of all land is untitled and distributed equally across farmers, agricultural productivity drops by 27.7%. The productivity drop is even larger when the distribution of untitled land is skewed.
Keywords: Agricultural Productivity, Untitled Land, Misallocation, Occupational Choice.
JEL Classification: E0; O11; O13; O4.