Abstract：The limitations of the traditional compensation policy based on material losses are the main factor that prevents relocated people from recovering from resettlement. This paper constructs a model of their livelihood resources and the sustainable development costs for people based on the Sustainable Livelihoods Framework for the China context, which relates the livelihood resources, boundary conditions, survival strategies and sustainable output development. Data collected from 571 migrants from 7 relocated sites in Southwest China was used in the structural equation modeling to verify the models accuracy. The model indicates that livelihood resources change with the initial boundary condition which leads to different survival strategies and different sustainable development outputs. Then, the strategies and outputs will have a feedback effect that affects the boundary conditions and livelihood resources. The process continues until the whole system balances.
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