Trends and Determinants of Income-Oriented Livelihood Transitions in Rural China

The study of livelihood transitions is conducive to poverty reduction and rural development. This study used three-wave panel data to quantitatively examine the livelihood transitions of Chinese rural households during two 2-year periods. The households were categorized into 5 livelihood strategy clusters depending on their income composition. The distribution of households among livelihood strategies exhibits a gourd-shaped structure and presents 2 trends, namely, the transition from on-farm strategies to off-farm strategies and an increase in non-labour households. The most common transition happens between the wage-employment-oriented strategy and the farming-oriented strategy, and the half-farming-and-half-employment strategy has the strongest mobility. Continuously, households with primary livelihood activities tend to persistently employ a strategy as the time spent on that strategy increases. From the perspective of poverty reduction, it is vital to understand the transition directions of farming-dependent households, and it is essential to promote slow but stable upward mobility. Farmland area and investment in farming have a negative effect on upward mobility, indicating the need for a more efficient agriculture operation mode, such as agriculture industrialization. The effect of labour migration is double-edged, and promoting the employment of members who have been left behind is crucial. In addition, the positive effects of network usage and education level of labors highlight the importance of improving the infrastructure and providing skill training in rural China. By analysing the livelihood distributions and transitions of rural households, comparing the disparities of the livelihood distributions and transitions of poor and non-poor households, and investigating the determinants of livelihood transitions, this paper aims to highlight the implications of these issues for poverty reduction in rural China.