Vulnerability and Chronic Poverty in Rural Sichuan

Abstract Chinese anti-poverty policy stresses the long-term structural nature of rural poverty. This paper shows that poverty in rural Sichuan during 1991–95 was both dynamic and persistent. A new measure of chronic poverty is defined––as a high vulnerability to being poor––and compared with traditional interpretations of chronic poverty as low mean consumption. Households are highly vulnerable to falling into poverty even when their average consumption is some distance above the poverty line. The determinants of low mean consumption and high vulnerability appear however to be similar suggesting that policies to increase mean consumption will also reduce vulnerability.

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