Poverty and income inequality effects of the relocation program in Shaanxi, China

Abstract

Governments in developing countries often consider relocation an effective way of fighting poverty. However, few studies have examined the impact of relocation on household livelihoods. This paper examines the impact of the largest relocation in modern Chinese history on migrants' well-being from the dual perspectives of poverty and income inequality reduction. Using survey data from southern Shaanxi and counterfactual analysis, we simulated the incomes of migrants in a non-relocation counterfactual scenario. We found a significant increase in household income and a significant reduction in the incidence, depth, and severity of household poverty after relocation. However, there was an increase of income inequality among relocated households. To promote more balanced development among those resettled, fairness of resource redistribution should first be ensured. Second, timely improvement in support services and facilities for the resettled communities should make full use of information technology to promote equal access to public services and ensure that migrants enjoy equal opportunities for development. Third, communication infrastructure between cadres and the masses should be improved, the information gap between them should be reduced, and there should be regular evaluation of migrants' satisfaction. Fourth, give full play to the role of religious and other charitable organisations in the fight against poverty, strengthen the synergy between different regions and groups, and foster a cooperative relationship between the strong and the weak.