Effects of Targeted Poverty Alleviation on the Sustainable Livelihood of Poor Farmers

Abstract

It is crucial to conduct a comprehensive evaluation of the effectiveness of targeted poverty alleviation (TPA) policies in promoting sustainable livelihoods among impoverished populations, particularly in light of the COVID-19 pandemic. The existing literature, however, predominantly focuses on assessing the policies’ effectiveness in terms of income, while neglecting other critical dimensions of sustainable livelihoods. In line with sustainable livelihood theory, we utilized data from the Chinese Household Financial Survey Database from 2017 and 2019 and employed a fuzzy regression discontinuity (FRD) method to systematically examine the implementation outcomes of TPA policies through the lens of “capability-strategy-results”. Our analysis revealed that the implementation of TPA policies had a positive impact on the ability of poor households to cope with unexpected shocks, as evidenced by an increase in the accumulation rates of material, social, and financial capital. Furthermore, we observed an optimization of livelihood strategies among poor households, with a significant increase in the proportion of wage income. These policies also had a positive impact on their livelihood outcomes, such as a reduced likelihood of falling back into poverty and an increased possibility of escaping from marginal poverty without relying on government subsidies; however, some limitations require attention. Notably, our analysis revealed that the policies did not effectively improve the human capital of poor households. To further explore the heterogeneity of policy effects, we categorized poor households into three groups based on their farmer’s market participation ability and willingness. Our findings indicate that TPA policies effectively reduced poverty among households lacking labor force through government subsidies and saw an increase in the proportion of medical insurance reimbursement; however, households lacking motivation or capability did not experience positive outcomes in the short term. Therefore, future support policies should prioritize these vulnerable groups and monitor their progress closely. Moreover, our analysis revealed that migrant work is the primary livelihood strategy among the poor, and stabilizing their employment faces significant challenges amid the COVID-19 pandemic. Consequently, additional policies and interventions are needed to address the adverse impact of the pandemic on the employment and livelihoods of low-income households.