Theoretical Analysis And Empirical Research On The Relationship Between China’s Rural Poverty And Human Capital

Poverty is a widespread phenomenon in the development of human society, is oneof the sharpest social problems, is also a common enemy of mankind, and theeradication of poverty is the primary task of the UN Millennium Development goals.China as the most populous country in the world, the Scale of poverty populationaccounted for the world’s20%. However, China’s economy develops rapidly, its people’sincome increase day by day, in the past30years, own to the reform and opening up,What’s more, with the efforts of the government’s poverty alleviation and developmentincrease steadily, the scale of rural poor population reduced greatly, headcount index fellsharply, the achievements of anti-poverty is significant, completed the United NationsMillennium Development Goals firstly.Yet, the scale of China’s poor is still very large, rural poverty is very grim. Thereasons are as follows: First, China’s poverty line is too low, if using the UN povertystandard to measure, the Scale of China’s rural poor will exceeds one hundred million;Second, when the poor decreased to a certain scale, the marginal effect of economicgrowth of poverty reduction will diminish; Third, efficiency of the aid-the-poor fundsdecreased,“impoverished by hospitalization”,“fell back into poverty due to illness”,“impoverished by disaster” or “fell back into poverty due to disaster” has occurred fromtime to time, very serious locally. Finally, under the influence of the adjustment ofindustrial structure, change the mode of economic growth, the world economicrecession and other factors, China’s economic growth has slowed, the situation ofemployment of labor intensive industry which related to the low income people closelyis grim, hindering the income increasing sustainable revenue growth. It requires us torecognize the problem of poverty in rural areas.However, the famous economist, Nobel laureate Amartya Sen thinks the mostimportant cause of poverty is lack of ability or deprivation, its main performance is thelow human capital. And international anti-poverty experience tell us that investment ineducation, health, nutrition and health on the poor, namely, human capital investment, isa effective measure. What’s more dialectical materialism think generation, developmentand extinction of things are a combination of internal and external factors, but internalfactors decided, external factors are auxiliary. Therefore, it is necessary to furtherdiscuss the relationship between human capital and rural poverty in china. This articlewill study on the relationship between the China’s rural human capital and poverty based on the theory of human capital and poverty, adopting both normative and positiveresearch methods, from the point of theory and empirical evidence. The specificcontents are as follows：Firstly, analyzing the current situation and the causes of poverty in rural China，constructing the framework of the causes of poverty in rural China from the aspects ofinternal factors and external conditions.On the one hand, analyzing the current situation of poverty in rural of China fromthe characteristics, distribution, and comprisal of the poor people, and measuring theFGT index in rural. Characteristics and distribution of the rural poor populationdetermine the situation of anti-poverty is grim, and it is still a long way to go. On theother hand, analyzing the current situation of human capital in rural from the education,health and migration and so on, and evaluating the comprehensive level of China’shuman capital in rural. Low education and poor health of rural residents’ human capitalin rural areas is barely satisfactory. Analyzing the reasons of poverty in rural Chinafrom two aspects of internal factors and external conditions and construct a frameworkof analysis of rural poverty causes.Secondly, this article will interpret the relationship between human capital andpoverty from micro perspective and test it by using the semilogarithmic model andprobit model based on CHARLS data.It interprets poverty from the constitution of human capital, and analyzes its impacton income. Low level of human capital of rural residents is the main cause of poverty,but the accumulation of human capital which caused by human capital investment canpromote the growth of peasant’s income. But, due to the price of the education andmedical service increase too fast, lack of fiscal investment in medical, education et al.human capital investment may make the farmer poor or deteriorated. The empiricalresults show that: The increasing of education level can high income and reduce theprobability of poverty; the relationship between per capita net income and health levelof rural residents is positive, but the relationship between the possibility of poor andhealth level is negative; the families which participate in the training or migrate gethigher income and the possibility of poverty are lower. At the same time, the resultsshow that education and medical expenditure hinder the income growth of farmers’,high the likelihood of poverty occurrence.Third, this article will analyze the influence of human capital on poverty from themacro perspective. In macro economy, human capital effect on poverty mainly by the economicgrowth and income distribution. Human capital influences on economic growth throughthe innovation, technology, the change of industrial structure and growth pattern, and iteffects income distribution via its’ factor function, disposition effect and income effectet al. Economic growth can reduce poverty through the "trickle down" effect, its sizedecided by the nature of the income distribution. As for the effect of human capital onthe poverty, empirical analysis shows that human capital may alleviate the poverty, butexisting threshold effect. The outcome of provincial-level panel model tells us that theinfluence coefficient of human capital on headcount index and the outcome of thresholdeffect model shows there exists differences between different regime. As for headcountindex, the effect in lower regime is larger than in high regime, as the other two indexes,on the contrarily.In addition, this article puts forward some proposals, such as developing ruraleducation fully, strengthening agricultural training, improving the medical security, landsystem, the household registration system and perfecting social security system in ruralbased on the human capital.In a word, this paper analyzes the relationship between human capital and ruralpoverty in theory and uses econometric method to test it empirically. It can also providereference for the government to format the rural poverty reduction policy in practice.