Essays on Sustainability and Poverty

The three chapters of my dissertation mainly study two related issues. Chapter 1 focuses on the sustainability problem concerning inter-generational welfare disparity, and Chapters 2 and 3 focus on the poverty problem concerning cross-sectional welfare disparity.

In Chapter 1, "Protecting the Breadbasket with Trees? The Effect of the Great Plains Shelterbelt Project on Agricultural Production", I empirically estimate the short- and long-term effects of planting windbreak trees on agricultural revenue by analyzing the Great Plains Shelterbelt Project implemented in 1935-1942 in the US. In order to address the endogeneity problem in the location choice of tree planting, I use a 100-mile-wide belt-shaped shelterbelt zone designated by the program as the instrument. My estimates show that a 10% increase in shelterbelt coverage in a county leads to a 7-10% increase in agricultural revenue. This increase is attributable to animal products rather than crops, and farmers in the treated counties were more likely to switch from cropland to pasture, especially for cattle ranching. In addition, I find heterogeneous effects by levels of soil erosion caused by the 1930s Dust Bowl. The regions with lower levels of soil erosion benefit from shelterbelts, whereas highly eroded regions do not.

In Chapter 2, "Poverty Targeting and Income Distribution: Evidence from China's National Designated Poor Counties", we study the impact of poverty targeting on household income using three natural experiments through adjustments in China's National Designated Poor Counties program between 1988 and 2008, in combination with agricultural promotion policies. With difference-in-difference analyses, we consistently find that when government publicity promoted agriculture, agricultural income of households in newly designated counties increased, while non-agricultural income declined. In addition, we examine the redistributive effects of the policy: an increase in agricultural income benefited the rich rather than the poor while a decline in non-agricultural income (mainly wage income) affected both the rich and the poor. More interestingly, once the designation ceased, people received less income from both agricultural and non-agricultural sources. Overall, this regional targeting policy led to an inter-sectoral distortion favoring agricultural production and provided no evidence that its policy package benefited the poorest households in the poor county.

In Chapter 3, "The Unintended Consequences of Employment-Based Safety Net Programs", we examine the consequences of increasing rural employment opportunities for the human capital accumulation of children in rural areas as employment guarantee program are widely used as an anti-poverty lever in the developing world. We evaluate the impact of India's flagship Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) on school enrollment. We exploit the timing of roll-out of MGNREGA across Indian districts and find that introduction of MGNREGA results in lower relative enrollment in treated districts. Using nationally representative employment data, we find consistent evidence indicating an increase in child labor highlighting the unintentional perverse effects of the employment guarantee schemes.