The Impact of Fiscal Expenditures on Vulnerability to Poverty of Rural Households and Its Mechanism-based on Evidence from CHIP Data
International Journal of Economics, Finance and Management Sciences
Volume 8, Issue 1, February 2020, Pages: 20-30
Received: Dec. 8, 2019; Accepted: Dec. 27, 2019; Published: Jan. 9, 2020
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Qinman Li, The School of Public Finance and Taxation, Central University of Finance and Economics, Beijing, P. R. China
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China's governments at all levels have played a significant role in reducing the absolute poverty through fiscal expenditure arrangements. At present, China has become the country with the strongest efforts and the most significant effect to fight against poverty in the world. However, the governance of poverty is not only simply to solve the existing poverty problem, but should take preventive measures from a certain forward-looking perspective, strengthen the family's ability to resist risks, and reduce the probability of poverty from the root cause. This paper empirically examines the impact of China's fiscal educational expenditure, fiscal social security and employment expenditure, and fiscal health expenditure on vulnerability to poverty of rural households by using the CHIP2013 micro-survey data, and analyzes its mechanisms. The vulnerability value is calculated according to the VEP method, and we identify whether the counties where the households are located are national poverty counties so as to distinguish the effects. The poverty vulnerability level of farmers in national poverty-stricken counties is significantly higher than that of non-poverty-stricken counties. The baseline regression results show that all three kinds of fiscal expenditures can significantly reduce the vulnerability of farmers. Health care expenditure has the strongest effect. Social security and employment expenditure has a stronger effect on the vulnerability of farmers in national poverty-stricken counties than non-poverty-stricken counties. Then, the explained variables are replaced with dummy variables that are vulnerable at 50% threshold, and the Probit model is used for robustness testing to prove that the baseline regression results are credible. Finally, this paper examines the mechanism by which fiscal expenditure affects the vulnerability of farmers, and verifies that it affects the vulnerability of household poverty by affecting individual employment decisions.
Vulnerability to Poverty, Fiscal Expenditure, Rural Poverty
To cite this article
Qinman Li, The Impact of Fiscal Expenditures on Vulnerability to Poverty of Rural Households and Its Mechanism-based on Evidence from CHIP Data, International Journal of Economics, Finance and Management Sciences. Vol. 8, No. 1, 2020, pp. 20-30. doi: 10.11648/j.ijefm.20200801.13
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This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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