Poverty Dynamics of Households in Rural China
The objective of our study is to identify patterns and causes of households' transitions into and out of poverty using the long household panel data on rural China in the period 1989-2009. We propose a discrete-time multi-spell duration model that not only corrects for correlated unobserved heterogeneity across transitions and various destinations within the transition, but also addresses the endogeneity due to dynamic selection associated with household's livelihood strategies. Duration dependence is generally found to be negative for both poverty exit and entry. The household choosing either farming or out-migration as a main livelihood strategy was more likely to escape from the persistent poverty than those taking local non-agricultural employment. Overall, the present study emphasises the central role of agriculture in helping the chronically poor escape from poverty.
Poverty transition, Discrete-time duration model, Correlated unobserved heterogeneity, Dynamic selection, Rural China
C33, C41, I32, O15
Economics, School of Social Sciences, University of Manchester, UK
Research Institute for Economics & Business Administration(RIEB), Kobe University
Rokkodai-cho, Nada-ku, Kobe
School of Agricultural Economics and Rural Development, Renmin University of China