Demystifying the geography of income inequality in rural China: A transitional framework

Abstract

In this paper, we first detect the uneven distribution of regional inequality in rural China with the per capita net income data at county level, and then diagnose the various factors that contribute to this as well as its driving mechanisms using the four-dimension transitional framework. The results suggest that rural inequalities are clustered at the province level, and those most unequal regions tend to be geographically gathered. Stemming from the framework, the study reveals that the spatio-temporal disparity in rural inequality is deeply embedded in the quadruple-transition process of marketization, globalization, decentralization and urbanization. Employing both the pooled OLS and spatial regime models, the study further unfolds that influences of the transition processes are diversified across regions and study periods. We finally argue that human investment rather than economic growth plays the key role in reducing the rural inequality in eastern provinces, and that the formulation of policies in line with regional characteristics would be helpful to address or alleviate rural inequality.