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

21

months’ worth of income. We split our sample households using this criterion, estimate DID for each
group and test whether or not those estimates are statistically significantly different between groups.

V. Effect of the Grain for Green Program on Off-Farm Labor

Basic Difference-in-Differences Results

Point estimates from the DID model reveal that the Grain for Green program increased off-farm
labor participation and decreased on-farm labor participation (Tables 3 through 6, column 1 in all tables).
Off-farm labor participation increased for both participants and nonparticipants, but it increased more
for participating households. A household that participates in Grain for Green increases its off-farm
labor by an average of 0.3 persons (Table 3, column 1).¹⁵ Intuitively, the size of the estimate implies that
one adult in one out of every three households that participate in the program enters the off-farm
employment market after the program is implemented. This estimate is not statistically significant at the
10 percent level. At the individual level, however, participating in the program increases the likelihood
of an individual person working off-farm by 15 percent, an estimate that is statistically significant at the
5 percent level (Table 5, column 1).

Similarly, participation in the Grain for Green program decreases the number of adults working
on-farm (Table 4, column 1). The program decreases participation in on-farm work by an average of
0.43 persons and this estimate is statistically significant at the 5 percent level. Intuitively, this means that
an adult in nearly one out of two participating households stops working on-farm. In the model that uses

<<   20   21   22   23   24   25   26   >>

More intriguing information