In order to improve the rural labor productivity and farmers’ income, land use transfer was launched and encouraged in recent years, especially the Thirteenth Five-Year Plan (2016–2020). This study aims to shed light on the impact of land use rights transfer on household labor productivity, based on a case study of Chongqing in China. Studies have revealed that land use transfer entails a process of self-selection and does not occur in a random manner. The study, therefore, addressed the issue of sample selection by applying propensity score matching. The study results suggested significant differences in the effects of land use transfer on household labor productivity. Specifically, renting land from other households had a positive effect on total labor productivity (TLP) and agricultural labor productivity (ALP). Moreover, TLP and ALP were found to be higher for households that rented more land or that were located in plain areas. Renting out land had a robust and positive effect on the TLP and non-agricultural labor productivity (NALP). TLP and NALP were also higher for households that rented out more land or that were located in plain areas. These findings suggest that land use transfer should be actively encouraged in plain areas. However, in mountainous areas, there is a need to pay more attention to expanding agriculture to benefit poor and marginalized populations in these areas.
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