Chronic Illness and Income Diversification in Rural China

Wenmei Liao, Jiawei Wang, Ying Lin and Yao Wang
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Wenmei Liao: School of Economics and Management, Jiangxi Rural Revitalization Strategy Research Institute, Jiangxi Agricultural University, Nanchang 330045, China
Jiawei Wang: School of Economics and Management, Jiangxi Rural Revitalization Strategy Research Institute, Jiangxi Agricultural University, Nanchang 330045, China
Ying Lin: School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710061, China
Yao Wang: Department of Human Resources and Social Security of Shaanxi Province, Xi’an 710000, China

IJERPH, 2021, vol. 18, issue 7, 1-15

Abstract: Off-farm diversification offers an important pathway out of poverty while health-impaired rural farmers can hardly seize the opportunity in developing countries. This paper investigates how chronic illness shapes livelihood structure and income generation in rural China. Our sample consists of 3850 rural households in Southern China and we rely on instrumental variable regressions to identify causal effects. We find that farmers with chronic illness tend to diversify towards local off-farm employments, rather than migrants, since local off-farm employments are more likely to act in a strategically complementary way to farming. Further analysis shows that income returns of diversification tend to be substantially higher for the health-impaired. While the relationship between diversification and income presents a conventional inverted U shape for the healthy, it is best categorized as upward sloping with diminishing marginal effects for farmers with chronic illness.

Keywords: health; off-farm; livelihood strategies; diversification (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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