Has China's “only-out, no-in” staff-reduction policy alleviated the material deprivation of forestry worker families? Evidence from China's Natural Forest Protection Program

Abstract

The existing literature primarily assesses the effectiveness of self-governance models in decentralized forest management, while studies on state-centered government regulation are scarce. This gap may introduce biases in comparative analyses of forest management models. This paper provides new evidence to evaluate China's government regulation model from a welfare perspective. First, we construct a material deprivation index (MDI) of forestry worker families based on a new individual-level household survey data collected from 56 state forest enterprises (SFEs) across three provinces in China. Second, combined with historical enterprise-level attrition data in SFEs, we find that, during the period of China's Natural Forest Protection Program, the “only-out, no-in” staff-reduction policy alleviated the material deprivation of forestry worker families. Various identification strategies including the instrumental variable method have confirmed the above causal relationship. Third, we further divide the MDI into three subindexes: quality of life, living environment, and social relations. We find that the cumulative staff-reduction scale has negative causal effect on reducing forestry worker families' material deprivation in terms of the second subindex, but has no effect in terms of the first and third subindexes. Lastly, when the sample is divided into two groups—households living on the mountain and down the hill—the negative causal effect exists only for the latter group. These results update the empirical literature on government regulation model effectiveness and provide significant references for comparative studies on forest management model diversity. They hold substantial implications for the innovation and optimization of forest management models in developing countries.