Behavioral responses to risk in rural China

摘要: Does risk perpetuate poverty in a credit-constrained economy? Jalan and Ravallion study portfolio other behavioral responses to measured using household panel data for rural China. One-quarter of wealth is held unproductive liquid forms. But only small share this appears be precaution against income risk. The authors estimate that eliminating would reduce the form by less than 1 percentage point. Moreover, effect confined largely middle-income groups; high-income households do not, it seems, need hold cautionary wealth, poor probably cannot afford so. find no evidence discourages schooling, but does inhibit out- migration labor. Generally, results provide limited support idea uninsured risks promote behavior setting. There such an effect, magnitude deemed important cause poverty.