Analysis on the Poverty Reduction Effect of Fiscal Transfer Payment in Rural Areas

Abstract

In the past 40 years of Reform and opening up, with the rapid development of China’s economy and the effective implementation of the government’s poverty alleviation policy, all impoverished counties have been lifted out of poverty by the end of 2020. As an important means of adjusting income gap, the government’s fiscal transfer payment has the potential effect of reducing poverty. Based on the panel data of 29 provinces from 2007 to 2018, this paper uses Pooled OLS regression and GMM analysis methods to study the poverty reduction effect of fiscal transfer payment on rural areas. The results show that the increase of fiscal transfer payment has a significant impact on the reduction of rural poverty in China.