Evaluating the impact of the fourth round of China's poverty alleviation program

Abstract

AbstractThis study evaluates the impact of China's fourth round of the poverty alleviation program, which targeted 14 contiguous destitute areas containing 680 counties and a population of 240 million. From 2012 to 2019, China allocated a total of 813.6 billion yuan (US$126.1 billion), primarily to economic development programs within these 14 areas. Using county‐level data from 2006 to 2019, our difference‐in‐differences and difference‐in‐discontinuities estimates suggest that the program increased GDP per capita in the 14 areas by over 45% from 2012 to 2019, with substantial gains observed in both the agricultural and nonagricultural sectors. Our preferred estimates suggest that the rate of return to the program ranged from 155.8% to 165.8%. Using data from over 14,500 rural households from 2006 to 2015, we find that the program significantly elevated rural income and reduced rural poverty. Although the income growth of extremely poor households was driven more by agricultural income growth, the income growth of relatively poor households primarily resulted from nonagricultural sources.