The role of non-farm incomes in reducing rural poverty and inequality in China
AbstractChinaÃ¢â¬â¢s record in reducing rural poverty has been nothing short of spectacular and should be a source of lessons for other countries. Rural poverty reduction is generally sought in the role of agriculture in contributing to farm incomes. However, non-farm employment in rural areas can also be a major contributor. Using detailed household survey data from Hubei province, we simulate the counterfactual of what rural householdsÃ¢â¬â¢ incomes, poverty, and inequality would be in the absence of access to non-farm sources of income. Results show that, without non-farm employment, rural poverty would be much higher and deeper, and that income inequality would be higher as well. We find that education, proximity to town, neighborhood effects, and village effects are crucial in helping particular households gain access to these opportunities. We also find that those who stay as pure farmers have non-observable characteristics that make them much more productive in agriculture, implying positive selection on these characteristics. Moreover, participation in non-farm activities has a positive spillover effect on household farm production.
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Bibliographic InfoPaper provided by University of California at Berkeley, Department of Agricultural and Resource Economics and Policy in its series CUDARE Working Paper Series with number 1001.
Length: 30 pages
Date of creation: 2005
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Postal: University of California, Giannini Foundation of Agricultural Economics Library, 248 Giannini Hall #3310, Berkeley CA 94720-3310
Other versions of this item:
- de Janvry, Alain & Sadoulet, Elisabeth & Zhu, Nong, 2005. "The Role of Non-Farm Incomes in Reducing Rural Poverty and Inequality in China," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7ts2z766, Department of Agricultural & Resource Economics, UC Berkeley.
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