From poverty to prosperity: assessing of sustainable poverty reduction effect of “welfare-to-work” in Chinese counties

Abstract

The “welfare-to-work” program is a comprehensive supportive policy in the 14th five-year plan period in China. In this paper, a systematical assessment of the long-run effectiveness of the welfare-to-work policy on poverty reduction is of great significance to stimulate the internal impetus of people who are lifted out of poverty to achieve income growth and prosperity and promote regional economic development. Based on the data at the county (city) level in China from 2000 to 2019 and the sustainable development theory, in this paper, a county-relative poverty evaluation system was constructed. Besides, the double difference method was employed to evaluate the effect of the welfare-to-work policy on poverty reduction and test its action mechanism. The findings are as follows: (1) the welfare-to-work policy has a significant poverty reduction effect and presents an inverted “U” shape. In addition, significant achievements have been made in “maintaining employment stability, ensuring income, strengthening skills, and supporting the economy” ; (2) the welfare-to-work policy boosts poverty reduction in counties through infrastructure construction, fiscal intervention, and financial tools; however, the financial tools play a positive role in poverty reduction in the northwest region and suppressed role in the southwest region, and has an insignificant effect in the central region; and (3) there are differences in the effect of poverty alleviation policies of the counties with different sustainable development levels, and the regions with higher development level have a stronger driving effect.