Abstract：The increase of rural residents’ income is a key to common prosperity. Exploring the growth factors and potential mechanisms of income will help to further refine the focus of policy, which will accelerate the overall rural revitalization and common prosperity. Based on the Rice Theory, this paper observes the effect of rice culture on the income level of rural residents.
This paper predicts that rice culture could promote social capital and thus increase rural residents’ income. Compared with the rural areas where rice is not cultivated, there are higher requirements for irrigation system, water rights allocation and busy farming season manpower coordination in the areas where rice is cultivated, which leads to a higher collectivism culture. These requirements increase interpersonal communication among villagers and promote mutual trust, which generates more social capital. Social capital can alleviate information asymmetry, reduce economic costs, and provide strong credit support for rural residents, thereby increasing rural residents’ income. Based on this, the paper predicts that rice culture could increase rural residents’ income through social capital.
Based on the data of 2016 China Labor-force Dynamic Survey (CLDS2016), the paper examines this prediction. In our regression model, the dependent variable is the logarithm of individual total income, and the key independent variable is “the primary grain in the village”, which is the proxy variable of rice culture. This paper controls several variables with individual, village and regional characteristics. In addition, we provide cluster-robust standard errors at the village level in our regression model.
Firstly, rice culture based on rice cultivation could significantly increase rural residents’ income. The results are robust when “rice suitability” is used as instrumental variable, which effectively alleviates the endogeneity problem. Secondly, when social capital is proxied by “gift expenditure between relatives and friends” and “trust in neighbors,” it is found that rice culture increases rural residents’ income through social capital. Thirdly, the effect of rice culture on income is heterogeneous. Rural residents with higher education level, experience of migrant workers, and residents in villages that organize agglomeration activities benefit from the income-increasing effect of rice culture. Lastly, the quantile regression shows that there are differences in the income effect of rice culture on different income groups: the income increasing effect is the most significant on the low and middle-income group, but not significant on the lowest income group.
The marginal contributions of this paper are as follows: Firstly, taking the cultural difference between rice planting in the south and wheat planting in the north as the breakthrough point, this paper discusses how it affects the income of rural residents by influencing social capital, which expands the cultural horizon for further understanding of rural residents’ income increase. Secondly, it is found that the effect of rice culture is limited by individual characteristics such as personal education level and migrant work experience. In addition, it is found that the effect of rice culture is the most significant on the low and middle-income group, but not significant on the lowest income group. Thus, this paper provides an inspiration for further understanding the relationship between the effect of culture and individual characteristics.
This paper examines the effect of rice culture on rural residents’ income and its mechanisms, which helps us understand the function mechanism of culture in the rural economic development and rural residents’ income increase. The high-level social capital and corresponding high-level income in rice-cultivation areas might be the continuity of long-lasting traditional collectivism culture over years. Policymakers can make full use of the valuable culture to promote the overall rural revitalization and common prosperity in rural areas.
