Empirical Study on the Relationship between Farmers’ Human Capital Investment and Rural Poverty

Literatures about the relationship between human capital investment and rural poverty are reviewed. According to the time-series data from 1990 to 2007, VAR model and variance research are used to study the relationship between household human capital investment and rural poverty. Results shows that there is long-run equilibrium relationship between household capital investment and rural poverty. Educational investment and health investment have significant impacts on the alleviation of rural poverty; while migration investment does not have significant impact on the alleviation of rural poverty. Among the factors causing poverty fluctuations, educational investment has greater impacts on poverty fluctuations than health investment in the short run, but health investment has greater impacts on poverty fluctuations than educational investment in the long run. Based on this, related countermeasures are put forward, such as further increasing the investment in education and health, implementing the compulsory education and social security system, considering the rural cooperative medical care, improving the retirement pension system in rural areas, and perfecting the training and technical extension system for population under the poverty line.