Economic reform and household welfare in rural China: evidence from household survey data

Existing studies highlight the uncertainty about changes in living standards in China's transition to market economy. Using household data from Jiangsu and Sichuan provinces, we examine the significance of demographic characteristics on rural household welfare which has generally been overlooked in the existing literature. Three sets of results are reported here: (i) estimates of total land allocated per household suggests that household marginal share of land is higher for a resident adult compared to a child or an old and lower for non-resident members or members engaged in non-farm activities. (ii) Regular adjustment of land to changing demographic composition generates a lack of security of tenure in land as well as an impetus for the growth of rural non-farm activities as reflected in the estimates of household per capita income and expenditure: an additional resident or non-resident adult, engaged in non-farm activities enhances rural household welfare while an additional child or old member lowers it, which also reflects the deterioration in the provision of social services. (iii) Probit analysis of poverty status based on poverty-level income suggests that the poor are likely to be those households with more children or old members and also those primarily depending on farm activities. In a situation of changing demographic patterns and a changing balance between rural farm and non-farm employment prospects, there is a need to identify the poor and the vulnerable adequately so that the latter do not have to bear the brunt of the reform. Copyright © 2000 John Wiley & Sons, Ltd.