Protecting Poor Rural Households from Health Shocks: Poverty Alleviation Practices in Chongqing, China

Abstract

In certain low- and middle-income countries, information asymmetry, human capital damage and long-term economic decline are longstanding problems in health-related poverty alleviation. Notably, China’s Targeted Poverty Alleviation program sheds new light on resolving these problems. Based on existing paradigms in the poverty research area, the purpose of this paper is to summarize and explore the roles of Chinese support policies in poor rural households coping with health shocks. Using a questionnaire survey of 4635 poor rural households in a municipality in Southwest China conducted from December 2018 to January 2019, this study examines the relationships between health shocks, human capital, support policies, and per capita household income. The results show that (1) apart from safety nets and cargo nets, monitoring nets are formed in China’s poverty alleviation practice, which could resolve the problem of information asymmetry. (2) Health shocks do not cause poor rural households to fall back into poverty. The reason for this is that safety net and cargo net policies are provided to relevant poor rural households by considering household human capital endowments and the information received from cargo nets. Through this method, patients can obtain effective support and caregivers can obtain off-farm employment opportunities. Thus, the ability of poor rural household human capital to resist health shocks is enhanced. (3) With the support of these policies, the negative effects of dependent family members and agricultural laborers on per capita household income are reversed. Thus, the long-term increase in poor rural household income is also ensured. These findings hold great value for other developing countries coping with health shocks and formulating anti-poverty policies.