Empirical Analysis Of China's Rural Credit Income Effect

In recent years,the rapid development of the rural economy has a more and more strong demand on rural finance,rural credit is not only a kind of new way for supporting agriculture,it is also a kind of financial service innovation,and it plays an important role in poverty alleviation work and economic development.The issues of the rural credit attracted much attention in recent years,before that,there have been many scholars studied the relationship between the credit support and income problems,but the conclusion is not unified,and most of the literature is based on the national level macro perspective to study this problem.However,from the macro perspective,this problem ignores the micro-directivity of financial services.So the article based on the dynamic data of Chinese Labor Force Survey(CLDS)micro survey,from the micro perspective,through the analysis of the rural credit status and family income,exploring the effects of rural credit support to the family income.As for the impact of credit support on income,previous approaches have ignored the role of unobservable factors,so the results is biased.Therefore,we consider the heterogeneity of immeasurable variables,and based on the treatment effect using heterogeneous instrumental variable method to quantitative analysis of the income effect of rural credit.The results show that the rural credit have a positive role to promote the family income,and the immeasurable variables play an important role in the peasant households' decision-making and household income.The immeasurable variables make the household that less likely access to credit have the highest marginal returns.At the same time,the article compares our model and multiple linear regression model,the results show that although the two kinds of model results prove that rural credit support will make the income increase,however,based on the results of the multiple linear regression model without considering the endogenous variables and the problem of selection bias,so the results overestimated the income effect of credit support.On the one hand,our empirical analysis confirms that rural credit plays an active role in the development of rural economy.On the other hand,we also provide advice to the government and farmers,farmers should be fully realize the benefits of rural credit,and use of the credit service to improve family income levels,and the relevant departments should mobilize farmers who have credit demands actively,relaxthe credit threshold properly,and reduce the farmers' credit constraints;In addition,the article also provides reference Suggestions for the improvement of existing credit policies,and provides new ideas for rural financial service innovation.The distinctive features of the article is that we considered adequately unobserved variables when we are talking about the credit impact on income,we estimate the income effect of the credit by using heterogeneity instrumental variable method,the previous literature were never used.Our sample covers the major provinces in China,and sample size is larger than the previous literature,so our sample has more reliability.