Do Differences in Modes of Production Affect the Ability of Ecological Restoration Projects to Improve Local Livelihoods?

Large ecological restoration projects have been widely implemented across the world since the 20th century, yielding complex ecological, economic, and social results. Today, balancing ecological restoration with local people’s livelihoods is a key issue. Based on the existing literature, this study proposes a “shock adaptation” mechanism to describe the response of rural residents’ livelihoods to the impact of ecological restoration projects. We hypothesize that adaptability varies across the modes of production. To verify our hypothesis, we used the machine-learning-based local projection (LP) method to analyze China’s Three-North Shelter Forest Program (TNSFP), with data for 596 counties from 2001 to 2020. After the TNSFP started, rural residents’ income dropped, rose, and then exceeded the starting point over 8 years. Moreover, significant heterogeneity exists between agricultural and pastoral areas. Agricultural areas recover faster and improve livelihoods, while pastoral areas take longer to bounce back. The results confirmed the “shock adaptation” mechanism and suggested the importance of the mode of production. Policymakers should add more social–ecological indicators to their evaluation systems, allow local communities more self-management, and offer extra help to those struggling to recover from shocks.