The Impact Of Private Transfer Payment On The Persistence Of Poverty In China

With the rapid development of China’s economy,people’s living standards have improved significantly since the reform and opening up.Poverty alleviation in China has also made great progress.And the incidence rate of poverty dropped from 84%in 1981 to 4.5%by the end of 2016.Over the past five years,China’s poverty reduction population has exceeded 13 million per year,and decisive progress has been made in the battle against poverty.In the future,if we want to achieve the goal of building a well-off society in an all-round way by 2020,we must clearly realize the shortcomings that need to be filled in the precise poverty eradication work.Especially in the background of the simultaneous decline of birth rate and mortality rate,the aging process in China is also accelerating gradually,and this trend will last for a long time.Compared with China’s per capita economy is still below the average level in the world,the ageing degree has reached the level of developed countries.The problem of "getting old before getting rich" is particularly prominent among the elderly and poor.Moreover,due to our basic national conditions,the corresponding public transfer payment policies such as old-age insurance and medical insurance are not yet complete,and there is a certain gap in people’s livelihood and welfare compared with developed countries.The emergence of the problem of"getting old before getting completed" will surely put tremendous pressure on our anti-poverty process.In addition,the time when the poor people get out of poverty will also have an internal relationship with the duration of poverty.Therefore,it is of great significance to study the persistence of poverty for us to win the battle against poverty.As a common form of informal welfare distribution in developing countries,private transfer payment may provide a safety net for those who are temporarily impacted negatively.When private transfer payments such as cash and gifts are given to the poor by the wealthy,the income and consumption gap between people may be narrowed.This undoubtedly provides a strong support for us to make up for the lack of capital markets in developing countries and to supplement social and public policy.Therefore,based on the personal level data of the China Health and Nutrition Survey(CHNS),this paper first makes a descriptive analysis of the income,Ginicoefficient and poverty of all samples from 2000 to 2015.Then,in order to understand the situation of poverty withdrawal and poverty trapping in China,this paper uses poverty transfer matrix to describe the probability of poverty transfer in different periods.For the poor population,we also use the survival analysis method of event history method to analyze the probability of poverty persistence and exit from a non-parametric perspective.From the parametric perspective,we compare the samples according to gender and urban/rural groups,to consider the impact of private transfer payments on poverty persistence in different situations.To make the results robust,we used these absolute poverty lines of $1.25 per day,$2 per day,$2.5 per day and the relative poverty line of 50%of the median income to make a comparative analysis.We also discussed the situation in the eastern,central and western regions and analyzed the possible reasons for these results.The study finds that,the incidence rate of poverty measured by those absolute poverty lines in China has decreased significantly during the whole study period.But the increase of Gini coefficient and the incidence rate of poverty measured by the relative poverty line shows that the income gap is widening while people’s income level increases.Samples initially in poverty will exit poverty in a short time under all poverty lines.However,in the later stage of the study,the speed of exit from poverty will slow down,that is,most of the poverty is temporary poverty.If measured by those absolute poverty lines,the longer the poverty lasts,the more likely these samples will be out of poverty.If measured by the relative poverty line level,the longer the poverty state lasts,the lower the instantaneous probability of exiting poverty.This is because the income growth rate of samples below the relative poverty line is lower than the average social growth rate,which makes the income gap wider.During the subsequent observation period,the risk rate returned to its initial level.Whether it is all samples or gender-based or urban-rural regression,owning private transfer payments can accelerate the sample’s exit from poverty.In terms of regions,the role of private transfer payments in promoting poverty withdrawal is more pronounced in the central region,and has little effect on the eastern and western regions.In order to achieve the goal of poverty alleviation,we must have a targeted grasp of private transfer payments to better play its complementary role in the government’s public transfer payment policies.On the other hand,we should further improve the public transfer payment system,such as old-age insurance and medical insurance.So that people can support themselves and have medical treatment for their illness,narrow the income gap and build a well-off society in an all-round way as soon as possible.