The Hidden Value Evaluation of Targeted Poverty Alleviation: From the Perspective of Income Spillover Effect of Floating Population

Abstract

China’s poverty-relief miracle is a large-scale quasi-natural experiment that has shown to be extremely successful. Effectively capturing and advancing the practical experience and historical significance of Targeted Poverty Alleviation (TPA) through comprehensive and in-depth evaluation research is a crucial endeavor in the field of policy evaluation. However, the retrospective analysis indicates a lack of comprehensiveness in existing research on TPA policy. Prevailing studies predominantly focus on the “explicit value” aspect of the effects, such as the economic growth in poverty-stricken counties and the income rise in affected households—essentially the “explicit value” part.

Considering the fact that TPA as a national project with substantial investments, it is imperative to expand the evaluation scope to encompass the indirect effects, delving into the realm of “unseen effects”. This necessitates a departure from the narrow perspective of solely concentrating on policy groups. To fully identify the “hidden value” and provide a thorough overview of the enormous impact that TPA policy has had on China’s rural development, a broader examination is required to uncover the potential “hidden value” and comprehensively outline the profound significance that TPA policy has brought to China’s rural development. Furthermore, such understanding can effectively propel the rural revitalization strategy and support China’s rural poverty governance strategy.

This article departs from the conventional perspective of focusing only on the “explicit value” of TPA policy effects and scrutinizes the potential “implicit value” from a broader perspective. Empirically, the floating population outside the set of impoverished households and their neighboring non-impoverished households is included in the perspective. An income effect evaluation is conducted utilizing the difference-in-differences method (DID) with data from the China Migrants Dynamic Survey (CMDS). This study also capitalizes on the unique spatial characteristics of the floating population, exploring its research value by connecting the “dual space” of outflow and inflow areas, which is rarely explored element in prior research.

The results indicate that the TPA policy has a significant positive income spillover effect on the outflow population and generating an estimated average of 79.2 billion Yuan in “unseen” benefits annually for this group of population. Group heterogeneity reveals a “Matthew effect”, with high-income floating populations experiencing a notably higher spillover effect than their low-income counterparts. The western group exhibits the smallest amount of income spillover effect when it comes to spatial heterogeneity in inflow places. Conversely, spatial heterogeneity in outflow places shows significant spillover effects for individuals with rural hometowns, while urban areas displaying negligible effects. The mechanism analysis underscores the role of peer effects, inter-regional cooperation, and enhanced public services in facilitating spillover effects.

Following TPA implementation, it is articulated with comprehensive rural revitalization. The historical practice of TPA constitutes the historical experience of rural vitalization and TPA constituting the essence of rural revitalization experience. Therefore, a comprehensive evaluation and summary of TPA’s historical experience is imperative while scrutinizing the Chinese government’s commitment to eradicating absolute poverty. This involves not only a meticulous evaluation of direct policy effects but also an effective assessment of “externalities” or spillover effects, to uncovering the potential “hidden value”. These conclusions provide different evidences and inspirations for effectively inheriting TPA’s strategies for the governance in the context of rural revitalization.