Poverty Dynamics of Households in Rural China: Identifying Multiple Pathways for Poverty Transition

Katsushi Imai and Jing You

No DP2011-35, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: The objective of our study is to identify pattern and causes of households' transitions in 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 re-entry. The household who chose either farming or out-migration as a main livelihood strategy was more likely to escape from this persistent poverty than those who took local non-agricultural employment, while the role of social protection, such as health insurance, was not universally good for alleviating chronic poverty. Overall, the present study emphasises the central role of agriculture in helping the chronically poor escape from poverty.

Keywords: Poverty transition; Discrete-time duration model; Correlated unobserved heterogeneity; Dynamic selection; Rural China (search for similar items in EconPapers)
JEL-codes: C33 C41 I32 O15 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2011-12
New Economics Papers: this item is included in nep-agr, nep-dev and nep-tra
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Related works:
Working Paper: Poverty Dynamics of Households in Rural China: Identifying Multiple Pathways for Poverty Transition (2012)
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