In the late 1990s, China's Yangtze and Yellow River Basins suffered devastating natural disasters widely attributed to the degradation of soil and water resources. The Government of China responded with a number of major environmental programs, the most expensive and influential of which, the Grain for Green (GfG) Program, was implemented widely from 1999. Under the GfG Program-also known as the Sloping Land Conversion or Conversion of Cropland to Forest Program-the central government compensates farmers to convert cropland on steep slopes or otherwise ecologically sensitive areas to forest or grassland. Its long-term success depends on households' ability to make sustainable changes to their household income streams and income diversification strategies. In this paper, we use a difference-in-difference estimation approach to examine the role of migration as a household-level response to the GfG Program, testing the extent to which individuals migrate following a reduction in land available for farming. Importantly, we exploit 15 years of data on migration decisions and establish that participating and non-participating households were on parallel migration paths before the program, thus refuting a key threat to causality in a difference-in-difference model. We find that participating families do, in fact, choose migration as an income diversification strategy more frequently than non-participants. The program effects varied over time but peaked post-Great Recession in 2011 when migration rates in GfG households exceeded those of non-GfG households by 5.9% points (p = 0.003) or about 26%. Our findings should encourage policymakers that families are making long-term adjustments to their livelihood strategies to avoid poverty in anticipation of the eventual withdrawal of government supports.
Keywords: China; Grain for green program; Income diversification; Migration; Payment for ecosystem services; Sloping land conversion program.