Analysis Of The Influence Of Social Capital On Farmers’ Income And Its Mechanism

The issue of "agriculture,rural areas and farmers" has always been a hot topic in academic research.Increasing farmers’ income is an important manifestation of improving the quality of China’s rural economic development,an important way to realize the "rural revitalization strategy",and an important measure to promote the goal of common prosperity.Since the reform and opening up,China’s rural farmers’ income growth has achieved remarkable results,especially for low-income poor people.During the "13th Five-Year Plan" period,more than 50 million rural poor people have escaped absolute poverty.At the key node of the historical intersection of the "two centenary" struggle goals,my country has achieved a comprehensive victory in the fight against poverty and completed the arduous task of eradicating absolute poverty,especially the poverty alleviation of the rural poor,which made a key contribution to achieve the goal of building a well-off society in an all-round way.However,due to urban and rural factors,regional factors,sectoral factors,and differences in education levels,the income gap between urban and rural areas is still obvious,and the imbalance in development still exists.As of 2020,the ratio of per capita income of urban and rural residents has reached 2.56 times.The high income gap between urban and rural areas hinders the implementation of the rural revitalization strategy,and the shrinking and unblocked traditional rural market is also an important obstacle to the economic structure of the main internal cycle.At present,our country is taking advantage of the situation to start a new journey of building a socialist modern country in an all-round way.Comprehensively promoting rural revitalization is a major task for the great rejuvenation of the Chinese nation.If the nation is to rejuvenate,the rural areas must be rejuvenated.Prosperity of farmers is the basic feature of rural revitalization.Farmers’ income level is an important criterion for measuring the quality of China’s rural economic development.Continuously improving farmers’ income is the core of consolidating the achievements of poverty alleviation and promoting rural revitalization.The report of the 19 th National Congress of the Communist Party of China pointed out that: "China’s economy has shifted from a stage of rapid growth to a stage of high-quality development.The key institutional guarantee for achieving high-quality economic development is to build and improve an "economic system with effective market mechanisms,vigorous micro-subjects,and a degree of macro-control." How to stimulate the vitality of microeconomic entities and increase the income level of farmers,the answer still needs to draw nutrients from the soil of the traditional Chinese economy and society.Social capital is a social structure based on social norms,trust,and network of relationships(Putnam,1993).Members use their knowledge sharing,mutual trust,and risk sharing functions to influence income levels and enhance economic vitality.Different from the traditional concepts of material capital and human capital,social capital takes an important role in facilitating cooperation,reducing transaction costs and overcoming the dilemma of collective action among members of society(Tabellini,2008).The the field of sociology first introduced the concept of social capital(Loury,1977),which has since been widely used in sociological research(Coleman,1990),political analysis(Putnam,1993),and economic analysis(Fukuyama,1995;Zak and Knack,2001;Durlauf and Fafchamps,2004).Combining the relationship characteristics of the "differential pattern" and "strong relationship type" of traditional Chinese social trust,social capital plays an important role in improving the quality of the system and promoting economic development,especially in the process of increasing farmers’ income.Existing research on the relationship between social capital and farmers’ income growth mainly has two views: one view emphasizes that social capital can help increase farmers’ income.For example,Bian Yanjie et al.(2001)showed that social network and social capital contribute to increasing income.With a significant positive effect,social networks can effectively promote employment and increase income.Jiang Naihua et al.(2006)also found that there is a positive correlation between social capital and income level,and social capital also indirectly affects laborers’ income by affecting other forms of capital and the ability of farmers.Another type of research points out that the impact of social capital on increasing farmers’ income is not significant.For example,Zhang Yuan(2009;2012)believes that the direct influence of social networks on the wages of migrant workers is extremely weak.Other scholars believe that the income effect of social capital depends on specific circumstances.For example,Guo Chao et al.(2014)found that the rate of return of "social relations" increased with the increase of income,the rate of return of rural residents "social relations" increased with the increase of income,while the rate of return of urban residents "social relations" was positive "U" shape.In general,academic research on the impact of social capital on farmers’ income levels has not reached a consensus,and the analysis of the transmission mechanism behind it is even more inconsistent.Based on the above analysis,this thesis uses China Household Finance Survey(CHFS)micro-data,through data description analysis method,to describe the basic information of farmers,farmers’ income,farmers’ social capital and other variables statistically,in order to describe the basic characteristics of farmers’ social capital and income levels;use simple least squares(OLS)to linearly regress social capital to farmers’ income levels,and at the same time classify farmers’ incomes to explore the impact of different types of social capital on different types of income levels;use Quantile regression(QR regression)to split the income level into multiple quantile points,study the influence of social capital on personal income regression under different quantile points,and empirically study the overall effect of society capital on the income of farmers.At the same time,it introduces farmers’ entrepreneurial behavior,human capital and rural system quality to study the transmission mechanism of social capital’s impact on farmers’ income.The main research conclusions of this article are summarized as follows:1.Social capital has a significant positive impact on farmers’ income.Under the control of other conditions,by constructing an indicator system of social network,social trust,social participation and social prestige,social capital has a significant positive impact on farmers’ total annual income..From the perspective of groups of different income levels,social capital has a greater impact on low-income farmers.Social capital measured by social network,social trust,social participation and social prestige has a significant impact on farmers with income levels in the 20% quintile.It supports the view that social capital can help reduce the rural income gap,and that social capital can increase the income level of low-income farmers.The estimation of instrumental variables shows that the conclusions of this paper have a robust causal relationship.2.Therefore,it takes farmers’ entrepreneurship as the research object to study the influence of social capital on farmers’ entrepreneurial behavior.Taking farmers’ entrepreneurial choices,farmers’ entrepreneurial willingness,and farmers’ entrepreneurial performance as the elements of farmers’ entrepreneurial behaviors,they verify the influence of social capital on farmers’ entrepreneurial behavior from both theoretical and empirical aspects.The empirical results show that social capital has a significant role in promoting farmers’ entrepreneurial behavior,and at the same time verifies the mechanism of social capital’s influence on farmers’ entrepreneurial behavior.On the one hand,social capital will broaden the channels for farmers’ funds to borrow,thereby increasing the availability of entrepreneurial funds and enhancing entrepreneurship performance;on the other hand,social capital will encourage entrepreneurs to adopt Internet operations and family operations,thereby increasing the scope and volume of business sales,and increasing the profits of startups.Using the mediation effect model,the article empirically verifies the transmission mechanism of social capital → farmers’ entrepreneurial behavior → farmers’ income.3.Human capital has a great influence on personal income,so the low stock of human capital of farmers has become an important factor restricting the increase of farmers’ income.By studying the interaction between social capital and human capital investment,it analyzes the impact of family social capital on human capital investment from a theoretical and empirical point of view: the higher the family social capital,the higher the family human capital investment,which represents social capital has a positive impact on education expenditures,training points,and basic education investment expenditures for family members.At the same time,through the mediation effect model,it is proved that the role of social capital in improving farmers’ income is partly realized by promoting the human capital investment of farmers’ families,that is to say,the human capital investment of farmers’ families plays a role as an intermediary variable between social capital and farmers’ income.The transmission path of social capital→human capital investment→improving farmers’ income is established.The innovations of this research mainly include the following three points:1.The article makes a more comprehensive measurement of social capital,and comprehensively describes social capital from the four dimensions of social relationship network,social trust,social participation and social prestige,so as to obtain a more comprehensive understanding of social capital on farmers’ income.2.The article analyzes the impact of social capital on different types of farmers’ income,and identifies the heterogeneous impact of social capital on farmers’ income through aggregate analysis and structural analysis,so as to obtain a more comprehensive understanding of the impact of social capital on farmers’ income.3.The article constructs the micro-foundation that social capital affects farmers’ income growth.There is still a lack of in-depth research and empirical analysis on the mechanism of social capital affecting farmers’ income in existing research.By sorting out the possible impact mechanism of social capital on farmers’ income,this paper selects farmers’ entrepreneurial behavior and human capital as channel variables to explain the impact of social capital on farmers’ income,and constructs the mechanism by examining the impact of social capital on farmers’ entrepreneurial behavior and human capital level.A reasonable explanation path has been found for social capital to promote farmers’ income.