Disparity of Rural Income in Counties between Ecologically Functional Areas and Non-Ecologically Functional Areas from Social Capital Perspective

Abstract

In China, income disparities between regions continue to widen, especially in rural areas where environmental policies are implemented, where regional development is more underdeveloped and inequality is high. This paper provides an explanation from the perspective of social capital. Based on the panel data of 2077 counties in 2001–2015, this paper finds that the difference in social capital between ecological and non-ecological functional areas is not only from the gap in the total amount but also from the gap in the income effects. Empirical evidence shows that, although there is a positive correlation between social capital and rural income, the difference between the income effects is further caused by the lower level of social capital in ecological functional areas than in non-ecological functional areas. It is proved that there is a gap between the income effects of social capital in ecological function areas and non-ecological function areas, especially among the low-income groups of the two sectors. The results of the further decomposition of the differences show that the total difference in rural income between ecological function areas and non-ecological function areas is about 40%, of which the contribution of social capital is greater than the contribution of the two sectors. Therefore, the national key ecological functional areas need to explore new models for poverty reduction through social capital.