Reducing rural income inequality and its spatial convergence in China during the past two decades

Abstract

Rural poverty and inequality are still big challenges for the world sustainable development. China has eliminated absolute poverty and reduced regional rural income inequality over the past two decades. To explain the spatial convergence of China’ rural income inequality, a comprehensive framework was proposed based on the convergence hypothesis. We examined the spatial convergence and influencing factors of rural income inequality using province-level panel data from 2001 to 2020. The findings showed that China's rural income inequality generally decreased from 2001 to 2010, the contribution rate of inter-regional rural income inequalities is he highest. There was a significant spatial β convergence of rural income change, indicating that rural income inequality in China has been effectively reduced and a catch-up effect has been created in low-income rural areas with a higher income growth rate. Social security and human capital factors play key roles in reducing regional rural inequality, especially in poor western regions. Meanwhile, China's targeted poverty alleviation policy amplified the positive impact on rural income convergence, and low-income regions benefited more from the policy. Then several suggestions were proposed for developing countries to reduce rural inequality and poverty.