Analysis of Income Inequality Based on Income Mobility for Poverty Alleviation in Rural China

Tingting Li,Hualou Long,Shuangshuang Tu,Yanfei Wang

doi:10.3390/su71215821

Abstract

Since the reform and opening up, the Chinese economy has achieved sustained high-speed growth. However, the widening gaps in income, especially for rural China, seem to be a dark lining to these extraordinary achievements. Taking the duration of poverty into the consideration, this article analyzes the income inequality of rural per capita net income (RPCNI) based on income mobility in rural China. Analysis results showed that Gini coefficient of RPCNI declined, but that income mobility was mainly limited in the interior for low- and high-income groups. Income inequalities rose sharply within eastern and western China from 1990 to 2010. Benefiting from the developed economy, the upward mobility was universal in eastern China. The spillover effect on neighboring poor counties was feeble in western China, which directly caused long-term rich and poor. The Gini coefficient of RPCNI in central China was always at a low level, corresponding to the phenomenon of short-term rich and long-term poor. In northeastern China, the Gini coefficient sharply decreased and the large body of income mobility between non-neighboring groups was quite remarkable. The spatial pattern of intra-provincial Gini coefficient and income mobility of RPCNI has been divided by the “HU line”, which is a “geo-demographic demarcation line” discovered by Chinese population geographer HU Huanyong in 1935. In southeastern China, the characteristics of income mobility of each county depended on the distance between the county and the capital city. The spatial pattern of income mobility of RPCNI in agricultural provinces was different from that in non-agricultural provinces. According to the income inequality and income mobility, appropriate welfare and development policies was proposed to combat rural poverty at both regional and provincial scales.

Highlights

The Chinese economy has achieved sustained high-speed growth at a rate of nearly 10% of gross domestic production (GDP) for the past decade [1,2]
We examine income inequality in rural China combined with a degree of income mobility by the exploratory spatial data analysis (ESDA), Lorenz curve, Gini coefficient and Markov chain model
The average rural per capita net income (RPCNI) of rural China increased by about 10 times, from 562 RMB to 5860 RMB during this period

Summary

Introduction

The Chinese economy has achieved sustained high-speed growth at a rate of nearly 10% of gross domestic production (GDP) for the past decade [1,2]. The rich, whose consumption demand have almost been met, occupy most of the wealth, while the poor have low income but relatively strong consumption demand. Under this circumstance, the consumer market is difficult to form and the economic development is extraordinarily blocked. The postulation said that the income inequality first rises and falls with economic development, tracing out an inverted-U-shaped curve [13]. It is essential for the tradeoff between income inequality and economic development in different stages of economic development

Objectives

Results

Conclusion