Divergent impacts of the grain to green program, landholdings, and demographic factors on livelihood diversification in rural China

• Published in: World development 2022-08, Vol.156, p.105917, Article 105917
• Main Authors: Giefer, Madeline M., An, Li
• Format: Article
• Language: English
• Subjects: Access to education; Agricultural economics; Agricultural land; Ambition; Demography; Diversification; Economic diversification; Education; Employment; Entrepreneurship; Farmers; Farms; Grain; Household size; Households; Incentives; Labor; Labor market; Livelihood; Marital status; Migration; Off-farm; Payments; Retirement; Work; Young adults; Youth
• ISSN: 0305-750X; 1873-5991
• DOI: 10.1016/j.worlddev.2022.105917

•Rooted in a “labor-increasing” versus “labor-decreasing” framework, this study finds divergent effects of a payment for ecosystem services program across local employment sectors.•The program’s income diversification benefits may be enhanced by improving access to education, and by incorporating concrete supports and incentives for off-farm employment and small-scale entrepreneurship.•PES administrators may improve results by targeting households most likely to transition their labor off-farm permanently, namely those with smaller landholdings, fewer and better-educated members, and those nearing retirement. China’s ambitious Grain to Green Program (GTGP) pays farmers to retire ecologically vulnerable cropland in pursuit of environmental recovery, with an added benefit of economic diversification. While there is compelling evidence that GTGP has promoted off-farm employment in a broad sense, little is known about what types of work participants take and whether these labor transfers will continue after payments expire. Studies also tend to focus on livelihood diversification through urban migration while ignoring the nuances of the local job market. Rooted in a “labor-increasing” versus “labor-decreasing” framework, this study finds divergent effects of GTGP across local employment sectors. While GTGP facilitates nonagricultural employment, it also acts as a possibly temporary replacement for agricultural jobs and does not significantly encourage entrepreneurship, which may hinder post-program retirement of cropland. Results also show cropland holdings, household size, gender, marital status, and especially education are influential predictors of labor allocation, suggesting the parcels most likely to remain retired long-term belong to male-headed households with fewer, better-educated members including unmarried young people. In addition, there is much space to improve GTGP’s income-diversifying effects by improving access to education and incorporating concrete supports and incentives for local off-farm employment and small-scale entrepreneurship.