Conservation Payments, Liquidity Constraints, and Off-Farm Labor: Impact of the Grain-for-Green Program on Rural Households in China

Emi Uchida, Scott Rozelle and Jintao Xu

American Journal of Agricultural Economics, 2009, vol. 91, issue 1, 70-86

Abstract: This study evaluates the labor response of rural households participating in the Grain-for-Green program in China, the largest payments for ecosystem services program in the developing world. Using a panel data set that we designed and implemented, we find that the participating households are increasingly shifting their labor endowment from on-farm work to the off-farm labor market. However, the effects vary depending on the initial level of human and physical capital. The results support the view that one reason why the participants are more likely to find off-farm employment is because the program is relaxing households' liquidity constraints. Copyright 2009, Oxford University Press.

Date: 2009
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Working Paper: Conservation Payments, Liquidity Constraints and Off-Farm Labor: Impact of the Grain for Green Program on Rural Households in China (2007)
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