Who Lost Most Wages and Household Income during the COVID-19 Pandemic in Poor Rural China?

ABSTRACT

China managed to eliminate all extreme poverty in rural areas in 2020. Poor households, however, may risk falling back into poverty due to the COVID-19. This paper examines the impacts of the pandemic on wages and household incomes among different groups in poor areas of rural China. Using a unique dataset from five poverty-stricken counties, we found that the pandemic has had large negative effects on wage income for migrant workers and workers in manufacturing, the private sector, and small enterprises. Compared with households relying on wage income, households relying on small businesses have suffered much more from the pandemic, whereas households depending on farming or transfer payments have been less affected. Although poor and ethnic minority households lost significant amounts of wage income due to the pandemic, they did not lose more household income than nonpoor and nonminority households. We conclude that support from the government has kept vulnerable households from suffering more than other households from the effects of COVID-19. Our findings suggest that the government can play a strong role in alleviating the negative impacts of the COVID-19.