A Comparative Analysis of Vulnerability to Poverty between Urban and Rural Households in China

Abstract

This study proposes a subjective poverty line for each household to quantify the vulnerability to poverty in urban and rural households by considering residents’ expectations and their propensity to compare their perceived welfare level with those of other community members. The findings show that the overall vulnerability incidence in urban households is lower than in rural households. The regional differential in terms of vulnerability to poverty continues to exist, but the western province in both urban and rural households has not shown a significantly higher vulnerability rate than in other regions. Educational qualification is a determinant of the vulnerability of rural residents, whereas it does not have remarkable positive effects on urban households. Meanwhile, the impacts of welfare systems upon both urban and rural households are larger than expected, while the coverage of them is incomplete and calls for government to implement more social reforms in order to mitigate the risk and buffer the vulnerability, and to adopt a more equalising approach (instead of unrestrained growth).