China's Sloping Land Conversion Program (SLCP) aims to restore degraded marginal cropland, often on slopes, to forest and grass covers to control water runoff and soil erosion and improve the ecological conditions. Additionally, the program seeks to reduce poverty, close income gaps between rural and urban households, and promote a more sustainable transition of the rural economy.This dissertation provides a comprehensive analysis of the SLCP's socioeconomic impacts on rural households in the provinces of Sichuan and Shaanxi. The specific research objectives are to assess the overall impact of the program on household income and its variation over time and at different earning levels, and to evaluate its impact on household labor allocation and structure change.Utilizing a panel dataset compiled by China's National Research Center of Forest Economics and Development, this dissertation employs some cutting-edge methods, including difference-indifferences (DID), propensity score matching (PSM), and quantile regression, to identify and estimate the program impacts. Coupled with econometric methods used, the dataset, which includes information on 1,620 households in Sichuan and Shaanxi during 1998-2014, enables a more thorough analysis of the SLCP's socioeconomic impacts over the sub-periods of 1998-2008 and 2009-2014, as well as the whole period.The study reveals that the SLCP had positive effects on households' total and land-based income in both provinces, with stronger impacts in Shaanxi. In Sichuan, the program influenced off-farm income and off-farm labor time negatively during 1998-2008 but positively impacted total labor time, land-based labor time, and off-farm labor time during 2009-2014. In Shaanxi, the SLCP's effect on off-farm income was positive, whereas its impact on households' total and land-based labor time was negative. When accounting for SLCP subsidies received in past years, the impacts on households' total and land-based income became more significant in both provinces. The effects on households' land production income in Shaanxi were positively influenced by subsidies received in the previous year. As households' participation time increased, the impact on their total and land-based income also increased in both provinces.The analysis across income quantiles further demonstrates that the SLCP subsidy had a significantly positive impact on households' total and land-based income in both provinces, with more substantial effects in Shaanxi. The program's influence on labor allocation and transfer varied across income groups and over different sub-periods. In Sichuan, the SLCP negatively impacted off-farm income for the lowest income groups during 1998-2008 and off-farm labor time for medium-high and high-income groups during 2009-2014. In Shaanxi, the SLCP negatively affected land-based labor time for low-income households and off-farm labor time for medium-high income households during 1998-2008. Moreover, the SLCP's impact on households' total and land-based income was more pronounced for households below the poverty lines, with stronger effects in Shaanxi. The program's influence on off-farm income was positive for households below the global poverty line in Shaanxi during 1998-2014, while a positive effect was observed for households above the national poverty line during 2009-2014.This comprehensive analysis has generated valuable insights to the understanding of the SLCP's socioeconomic impacts on rural households in China. By considering different income groups, poverty lines, and time periods, the study provides evidence-based policy recommendations for the design and implementation of more effective and sustainable ecological restoration programs.
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