Household Income Structure and Poverty Vulnerability: A differential Analysis Based on Chinese Families

Abstract

Abstract The focus of poverty reduction has shifted from poverty incidence to poverty vulnerability in China. This paper mainly studies the influence of different income sources on the probability of poverty incidence in Chinese households. Through theoretical analysis, we can find that the diversification of income sources can significantly reduce the poverty vulnerability for all households, in which the increase of wage income shares will reduce the poverty vulnerability, and the increase of transfer income shares will do the opposite. Distinguishing between urban and rural households, the rural household's agricultural income shares has a threshold effect on poverty vulnerability, while the urban household's industrial and commercial income shares also has a threshold effect on poverty vulnerability. Firstly, promoting employment is still an important policy to prevent returning to poverty, but at the same time, we can also diversify the income structure of low-income families in line with local circumstances; Secondly, the focus of poverty alleviation for rural households and urban households should be treated differently. The former is mainly targeted at low-income families with predominance of agricultural income, while the latter are mainly targeted at low-income households with predominance of industrial and commercial incomes. Thirdly, the government can take consideration into the continuity of poverty alleviation work, and pay more attention to households with incomes below the threshold and with a single income.