Targeted Poverty Alleviation and Entrepreneurship Among The Poor

Abstract

We examine the effect of China’s Targeted Poverty Alleviation (TPA) on the entrepreneurship of poor households and the effect of entrepreneurship on their economic conditions, using data from the China Household Finance Survey conducted between 2013 and 2019 and employing a joint Difference-in-Differences with propensity score matching (PSM-DID) model. TPA significantly increased the probability of poor households’ entrepreneurship, with mechanism analysis indicating that TPA can promote entrepreneurship by providing microcredit to the poor. However, entrepreneurship did not improve their economic conditions and subjective well-being or achieve the ultimate goal of anti-poverty. Thus, entrepreneurship’s role in anti-poverty should be reconsidered.