Deng Quheng

Education and the Poverty Trap in Rural China: Closing the Trap

This is an ambitious attempt to view the relationships involving education and income as forming a system, and one that can generate a poverty trap. The setting is rural China, and the data are from a national household survey for 2002, designed with research hypotheses in mind. The paper shows how and why the returns to education vary according to household and community income. It examines the effects of education on income, innovation, health and happiness, and shows how education can be important in helping people to escape from various dimensions of poverty. The results are brought together to form an empirical model of a poverty trap, and the implications for poverty analysis and for educational policy are considered.

Di Bao Receipt and Its Importance for Combating Poverty in Urban China

Since the second half of the 1990s, economic restructuring in urban China has led to widespread joblessness and income insecurity. The rapid expansion of the system of social assistance, Di Bao, can be understood from this perspective. Using a survey covering large parts of urban China in 2002, we investigate factors affecting receipt and how receipt affects urban poverty. Results from estimating probability models indicate that social assistance receipt is strongly linked to joblessness among household members, the households expenditure burden, as well as the lack of financial assets. Furthermore, a long education of the household head and membership in the Communist Party reduces the probability of receiving social assistance while having been sent to rural China during the Cultural Revolution increases it. For some types of households, receipt of Di Bao differs greatly across cities in China. The social assistance payments appear strongly targeted to the poor. However, as the Di Bao payments typically are small and many of the urban poor are not receivers, much urban poverty remains.

The Hukou Converters—China's lesser known rural to urban migrants

This article studies people born in rural China who now live in urban areas of China and possess a residence permit, an urban hukou; these are the hukou converters and they are examined using large datasets covering substantial parts of China in 2002. According to our estimates, there are 107 million hukou converters constituting 20% of the registered population of Chinas urban areas. Presence of a high employment rate in the city, that the city is small or medium-sized, and that the city is located in the middle or western part of China are factors which cause the ratio of hukou converters in the registered city population to be comparatively high. The probability of becoming a hukou converter is strongly linked to having parents with relatively high human and social capital and belonging to the ethnic majority. Compared to their rural-born peers left behind, as well as to migrants who have kept their rural hukou, the hukou converters have much higher per capita household incomes. Years of schooling and CPC membership contribute to this difference but most of the difference remains unexplained in a statistical sense, signalling large incentives to urbanise as well as to receive an urban hukou. While living a very different life from their peers left behind, the economic circumstances of Chinas hukou converters at the destination are, on average, similar to the urban-born population. Hukou converters who receive an urban hukou before age 25 do well in the labour market and we have reported indications that they actually overtake urban-born peers regarding earnings. In contrast, hukou migrants who receive an urban hukou after age 25 do not catch up with their urban-born counterparts in terms of earnings.