Income Diversification of Rural Households in China

This article examines how different patterns of farm-level diversification affect the income levels of rural households in China. Using quantile regression analysis of data from a rural household survey, the empirical results exhibit significant differences in diversification effects across rural income strata and various structural characteristics. Diversification, especially involving nonfarm employment and migration, brings a monetary premium to low-income rural families and an income discount to high-income families. The policy implications suggest the encouragement of labor-intensive enterprises in rural areas and improvement of labor quality through rural education and training programs.