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A Empirical Study on Measurement of Ethnic Poverty and Main Influencing Factors of Poverty Reduction

Author: DanDePeng
Tutor: ZhengChangDe
School: Southwest University for Nationalities
Course: Chinese minority economic
Keywords: Poverty Reduction Economic Growth Industrial Structure LaborIntensive Education Efficiency Ethnic Area
CLC: F323.8
Type: PhD thesis
Year: 2013
Downloads: 83
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Abstract


As the reason of location, resources endowment and historical factors, ethnic area isthe most difficulty and important region for China’s poverty reduction. All the anti-povertyprograms focus on ethnic area since1986, such as poverty county policy,87nationalpoverty alleviation program and the development-oriented poverty reduction program forrural China and so on which enhance the poverty situation of ethnic area greatly. However,the populations below poverty line in ethnic area are much more than other areas. Ethnicarea is characterized by the largest number of poor people and the largest rate of fallingback to poverty again. The depth and width of poverty in ethnic area is higher than nationalaverage level. The people in ethnic area are lack of self-development capacity. The formerpoverty reduction achievement depends heavily on poverty reduction program and transferpayment. Nowadays, the effect of economic on poverty reduction is weaker than beforeand ethnic area faces the risk of persist poverty and spatial poverty. How to achieve thepersistence poverty reduction is the key factor for China to complete the building of amoderately prosperous society in all respects. So, based on the reality need and the finalaim of human development, the ethnic area’s poverty problem is worth more attention tofind the more effective measure and identify the mechanism of poverty reduction to let theethnic area get rid of poverty forever.For the aim of finding the trend of poverty dynamic evolution and searching for themore effective poverty reduction measure, this paper includes two aspects: firstly, we willreview the poverty reduction history of ethnic area; secondly, we will analyze the factorsaffecting poverty reduction, and identify poverty reduction mechanism.In order to analyze the trend of poverty dynamic evolution, we describe the someeconomic indices of ethnic area, such as economic development, industry structure,income of people in poverty, income and consumption of different subgroups. After then,we use FGT index to measure poverty incidence rate, poverty gap and squared poverty gapof ethnic area. We also analyze the trend of poverty from different period.We analyze the poverty reduction factors and mechanism from the view of microobservation along the way of "economic growth-employment-income distribution-income growth (poverty reduction)". The factors that influence poverty reduction can bedivided into three aspects:(1) The demand factors that influence poverty reduction aremainly economic growth and industry structure. Economic growth can increase the labordemand by trick-down effect. And the employment structure is depended on industrystructure, the economy with a higher growth rate which can absorb more low-skill laborforces will gain greater poverty reduction;(2) Human resource is the main supply factorsthat can influence poverty reduction. The people with more education attainment andhigher education quality can induce more poverty reduction, because they can gain ahigher wage;(3) Income distribution can also influence poverty reduction. Incomedistribution is mainly depended on markup in production market and labor market. A larger markup in production market means more surplus reward for capital and labor force toshare. Meanwhile, the labor market markup determines the final labor share or capitalshare of income. We don’t focus on the market markup, because we assume the marketmarkup is a constant variable in a short time. So, the main factors that influence povertyreduction we analyze are economic growth, industry structure and education.This paper has eleven chapters. Chapter one is an introduction. In this part, we discussthe context and meaning of this paper. We also identify the emphasis, difficulty, innovation,shortage and the direction for future research. Chapter two is a literature review. In thispart, we define some main conceptions referred and review the literatures on therelationship of economic growth and poverty reduction. We identify the main factors thatinfluence poverty reduction by analyze the relative theory and empirical conclusions.Chapter three analyze the social-economic development and poverty reduction of ethnicarea through describing the economic growth, industry structure, education attainment,income and quantity of poor people. Chapter four is a study on the theory of povertymeasurement. In this part, we discuss the measurement of FGT poverty indices such aspoverty incidence rate, poverty gap and squared poverty gap based on Lorenz curve.Chapter five and six discuss the poverty dynamic trend of ethnic area by calculating theFGT poverty index of urban and rural area. We also identify the different poverty reductioncharacters of different provinces. In chapter seven, we construct a theory model to analyzethe factors that may influence the poverty reduction based on the main characters of ethnicarea. Chapter eight researches the relationship among economic growth, incomedistribution and poverty reduction in ethnic area. We discompose the poverty reductioninto growth effect and distribution effect using Datt-Ravallion method. Chapter nineconstructs a theory model to analyze the relationship among industry structure, laborintensive and poverty reduction in ethnic area, and test the relationship through anempirical method. We also do a robust test for urban area and rural area to ensure therelationship. Chapter ten is a research on the relationship between education and povertyreduction. In this part, we construct a theory model to import education variable into theendogenous growth theory. We also test the relationship by doing an empirical test androbust test. Chapter eleven gives the main conclusion of this paper and discusses thedirection for the future research.The main opinions and conclusions of this paper are:(1) The population below thepoverty line in ethnic area decrease consistently, but the rate is slower than other areas andby years. Ethnic area is still the deepest and widest area of poverty. The marginal effect ofpoverty relief instrument is declining now, so it is harder and harder for ethnic area to gaina consistent poverty reduction. Ethnic area faces the hardest part of poverty reduction.(2)The factors that can impact the poverty reduction effect come from three aspects, such aslabor demand, labor supply and income distribution. Economic growth and industrialstructure can impact poverty reduction through labor demand. Education attainment andeducation quality can impact poverty reduction through labor supply. Income distributioncan impact the transformation from economic growth to income of the poor. So, the mainfactors that can impact poverty reduction in ethnic area are economic growth, industrialstructure and human capital(.3)The effect of economic growth on poverty reduction is nothomogeneous among different income group. The higher income groups gain more from economic growth. The poverty reduction policy intends to aim on the people near thepoverty line. So, the poor people near the poverty line can gain a more rapid income andconsumption increase rate. However, the policy can not enhance the welfare of deeppoverty.(4) At the beginning of China’s Western Development Program, economic growthhas a significant trickle-down effect on all the groups, which increases the totalconsumption of all the groups. However, the trickle-down effect of external-inducedeconomic growth on each group is not homogeneous. The higher income groups gain morethan other groups. Ethnic area rethinks the problem of fair or efficiency and absorbs theexternal-induced economy. And the economic growth of ethnic area is becoming morepro-poor. The impact of external policy on ethnic area is propitious to capital and high-skilllabors. But, when the ethnic area’s economy absorbs the external-induced industrialstructure, the high elasticity of policy will decline consistently.(5) Relative poverty ofethnic area is increasing. The poverty reduction policy in the future need emphasize therelative poverty problem. The poverty gap and squared poverty gap are increasing, whichshows the unfairness of income distribution among the poor people.(6) The pattern ofeconomic growth and the degree of labor-intensive do have significant effect on povertyreduction. The primary and the tertiary sectors are the real driving force in ethnic areas’progress against poverty, and the effect of the secondary sector on poverty reduction is theweakest. The key points for west China to achieve sustainable poverty reduction are: onone hand, the ethnic areas should hold a rapid and steady growth; on the other hand, thepattern of economic growth should be based on local comparable advantage and enhancethe inclusiveness of local labors. Meanwhile, we should reduce the trade cost ofparticipating the economic activities.(7) Poverty is stable, so it exists persistent poverty inWest China; education expenditure has no significant influence on poverty reductionbecause of the tradeoff between education quality and average years of school attainment;the quality of education can achieve more poverty reduction in urban area than averageyears of school attainment; average years of school attainment has a threshold effect onrural poverty reduction, and effective education has negative influence on povertyreduction. As west China is far away from technology frontier, so medium education ismore important for rural poverty reduction.

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CLC: > Economic > Agricultural economy > China 's agricultural economy > Construction and development of agricultural economy > Agricultural income and distribution
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