Unresponsiveness to Microfinance: Evidence from Chinese Poverty Reduction Practices
Thursday, January 16, 202012:00 PM - 1:30 PM (Pacific)
Encina Hall, Third Floor, Central, C330
616 Jane Stanford Way, Stanford, CA 94305
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.