Does the county-based poverty reduction policy matter for children's human capital development?

Abstract

We evaluate the effects of China's large-scale county-based poverty reduction policy on children's human capital development. Based on a difference-in-difference model and multiple years' household and county-level datasets with national coverage, we find that this nationwide county-based poverty reduction policy significantly facilitates children's human capital development in poverty counties. The effects are more pronounced for children experienced consecutive treatment and those in more impoverished households. Our heterogeneity analyses indicate that there are not notable differences across the subsamples by gender, number of children, parental education attainment and ability. In addition, in terms of the channels through which this program increases children's cognitive outcomes, the program significantly promotes internet access in low-income families, extends children's learning time, and improves children's mental health condition, thus enhancing their human capital accumulation.