The extraordinary achievement of Chinese poverty reduction practice has been well acknowledged. Meanwhile, in similar practices throughout the world, microfinance, as the most widely adopted policy tool, has recently been documented to generate almost nil impacts, a frustrating puzzle for both the academia and policy practitioners. By employing the micro-level data of Chinese households from 2005 to 2010, we investigate the effects of poverty fund injection on incomes and expenditures. The empirical results show that the increased income observed afterwards mainly comes from the fund itself, rather than any increases in households’ business and/or labor income. Next, in order to rule out the possibility that the weak impacts on income comes from the decreased prices as a result of increased supply of agricultural markets, we study the treatment effects on the quantities of 122 agricultural products that households produce and their selling prices, and find that those quantities and prices barely change after the poverty fund injects.
Jing Zhang, Associate Professor, graduated from Peking University (BA, MA) in 2005 and received her PhD in economics from University of Maryland in 2011. After that, she has been working in School of Finance at Renmin University of China. The focus of her research lies in health economics and public finance. Her research has been published in the leading international and Chinese academic journals, including Journal of Development Economics, Journal of Health Economics, China Economic Review, The Journal of World Economy (in Chinese) etc. She was invited to present at many prestigious universities and research institutes, such as Stanford University, the World Bank, the Asian Development Bank, Peking University. She also worked as a consultant at the World Bank (Washington, D.C.) from 2010 to 2011 and in 2015.