Poverty Stories of rural households in China: The case of North Jiangsu

Abstract

After decades of rapid economic growth and massive rural-to-urban migration, rural poverty in China has been largely alleviated. Existing literature has highlighted the crucial role played by non-farm employment in the rural population's escape from poverty. However, despite some engagement in non-farm employment, a huge population in rural China remains poor. Why rural households remain poor in spite of non-farm employment has not been sufficiently explored by scholars. To fill the research gap, this paper explores the underlying mechanisms of poverty among the poor rural population, based on a recent questionnaire survey (n = 2,822) conducted in rural North Jiangsu in China. Our multinomial logistic regression model and OLS regression model show that education is positively associated with the likelihood of engaging in non-farm sectors. Relatively low education attainment of working-age household members (secondary education and below) restricted the earnings from non-farm activities, reducing the likelihood of escaping poverty. Supporting higher education for their children is often a heavy burden for poor non-agricultural rural households, driving them into the poverty trap. The results also show that significant family events, such as severe illness and children's college enrollment, have kept rural households poor, even if some household members have participated in non-farm activities through migration or working in the local non-rural sector. In addition, instead of being looked after, some apparently dependent family members (the elderly) undertake agricultural activities and domestic work to support the out-migration of the labor force in poor rural households to enable household wealth accumulation. The findings suggest that policymakers should implement a series of reforms, especially regarding improvement in health insurance and education and the economic development in the local areas (incl. rural areas and nearby towns) to deal with rural poverty.