Income Inequality In Rural China Research Articles

Impact of e-commerce on income inequality: evidence from rural China based on cross-county panel data

ABSTRACT Although information and communications technologies (ICTs) are developing rapidly worldwide, evidence of the relationship between e-commerce and regional income inequality in the rural areas of a developing country remains scarce. Using original cross-county panel data, this study investigates the impact of e-commerce on regional income inequality in rural China, taking into consideration endogeneity issues. The results indicate that e-commerce may increase income inequality in developed counties but reduce income inequality in the less-developed counties; however, the total effect of e-commerce on overall income inequality is insignificant. The decomposition results show that differences in e-commerce accessibility contribute to widening the income inequality between developed and less-developed counties. In contrast, the differences in the income returns of e-commerce usage contribute to reducing income inequality. The empirical results suggest that a policy promoting e-commerce development may reduce income inequality in less-developed regions.

The Misestimation of Urban‒Rural Income Inequality in China

The Misestimation of Urban‒Rural Income Inequality in China

Digital technology access, labor market behavior, and income inequality in rural China

This study uses China Family Panel Studies (CFPS) data from 2010 to 2018 to empirically investigate the interplay between digital technology access, labor market behavior, and income inequality in rural China. The following salient conclusions are derived. Digital technology access has a substantial negative influence on individual income inequality in rural China, with a more pronounced inhibitory effect on inequality among low-income groups, males, middle and higher professional classes, and younger cohorts. Mechanism analysis suggests that digital technology access significantly impacts a range of rural labor practices, including increasing the frequency of digital technology use among rural inhabitants, decreasing credit costs, enhancing entrepreneurial activities, and boosting rural labor mobility. Based on these findings, this study proposes accelerating digital infrastructure development in rural regions, improving digital and financial literacy among rural residents, and refining inclusive digital financial services to facilitate more stable and sustainable progress to promote common prosperity.

Digital financial inclusion and the urban–rural income gap in China: empirical research based on the Theil index

This study examined the effect of digital financial inclusion in reducing the urban–rural income inequality in China. Based on city-level panel data, the results showed that digital financial inclusion narrowed the urban–rural income gap significantly by boosting economic growth. The results were robust when the core explained variables were replaced. Heterogeneity analysis showed that digital financial inclusion indicates regional differences in narrowing the urban–rural income gap. This study puts forward corresponding countermeasures for the development of digital financial inclusion and adds to the research on this very topical subject.

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

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.

Impacts of farmer cooperative membership on household income and inequality: Evidence from a household survey in China

While joining farmer cooperatives has been identified as a way for farmers, especially small farmers, to overcome their limitations in the marketplace and increase their income, this paper presents an analytical framework for examining how farmer cooperative may increase farmer income in rural China, empirically assesses the impacts of such membership on household income, and examines how the membership may affect income inequality. Data from a large-scale survey of rural households in China are used to examine the impacts of farmer cooperative membership and other factors on household income through a multivariate regression analysis and to test whether the impacts are different across income groups through a quantile regression analysis. The propensity score matching technique is used to address potential self-selection bias problems in the dataset and quantile regression is used to examine the impact for different income quantiles or groups of farmers. The empirical results indicate that farmers participating in professional cooperatives, on average, earned significantly higher income than their counterparts, but the positive impact was not statistically significant for low-income quantiles. This finding suggests that encouraging the development of and participation in farmer cooperatives could increase the average income but may not contribute directly to the policy goal of reducing income inequality in rural China.

Effect of industrial structure on urban–rural income inequality in China

PurposeSince 1978, China has made tremendous economic achievements through industrial upgrading. However, these achievements are accompanied by an expanding income gap between rural and urban areas. The purpose of this paper is to examine the relationship between industrial structure and urban–rural income inequality in China.Design/methodology/approachUsing the fixed-effects model and provincial data for the period 1985–2019, this paper estimates a linear relationship between industrial structure and urban–rural income inequality. By decomposing total income inequality into four components, the paper then analyzes how industrial structure affects each component.FindingsThe results show that industrial structure imbalance and industrial upgrading are positively associated with urban–rural income inequality. The positive effect of industrial imbalance mainly comes from widening the wage gap, while that of industrial upgrading mainly comes from aggravating business income inequality and property income inequality. Moreover, industrial balance and upgrading are conducive to increasing the share of wage income at the cost of property income.Originality/valueBy progressively examining the total inequality and the inequality of income components, this paper provides a better understanding of how industrial structure affects urban and rural income inequality. The findings of this study highlight the “inequality cost” associated with industrial structure adjustment, which provide policy-related insights on the balance development of urban and rural areas.

Can agglomeration of producer services reduce urban–rural income inequality? The case of China

AbstractIn this study, we construct a theoretical model and investigate the impact of agglomeration of producer services (APS) on urban–rural income inequality in China. The mediating effects are explored. Results indicate that the growth of APS can not only narrow China's urban–rural income gap directly, but also have an indirect negative effect on income inequality by promoting urbanisation evolution and human capital accumulation. Furthermore, the agglomeration of six sub‐industries is conducive to reducing the income gap. Among them, the agglomeration of the traffic, transport, storage and post has the greatest effect, while the effect of information transfer, computer services and software agglomeration is not significant. In addition, the results of regional heterogeneity show that only in the low APS region can APS and income inequality show bidirectional causality.

Revisiting income inequality in rural China: a decomposition by regression approach

This study aims to investigate the sources of income inequality in rural China. The regression-based decomposition approach is employed to measure the relative contribution of each determinant to net income of rural residents in China. The analysis is based on a unique database of financial development compiled at the county level. This study contributes to the literature on income inequality in China by filling a gap in existing literature which is based mainly on provincial and survey data. The results clearly reveal that financial development, industrialization, the development of the tertiary sector and employment are important income determinants and contributors of intercounty inequality in rural China. The findings may provide valuable information for combating inequality in the years ahead.

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

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.

Impacts of Migration and Remittances on Ethnic Income Inequality in Rural China

Summary Migration is often viewed as the best option for poor rural households to exit out of poverty, although the distributional effects of migrants’ remittances tend to be ambiguous in the literature. Given that increasing income inequality is a major concern and policy issue, this paper examines the impacts of migration and migrants’ remittances on income inequality in China’s rural minority areas using recent proprietary household data. Treating migrants’ remittances as a potential substitute for income, the results reveal that migration significantly boosts income for all ethnic groups, although the returns to ethnic minority households tend to be less than for Han households. Decomposition analyses further reveal that migration increases inequality between ethnic groups despite reducing spatial inequality. These countervailing effects imply that the continual transfer of rural–urban migrants will likely lead to spatial convergence despite reinforcing ethnic inequalities in rural minority areas. Importantly, the percentage contribution of ethnic inequality to total inequality is larger than that of spatial inequality across sampled rural locations, thus highlighting the fact that the ethnic dimension is an important, yet often overlooked component of inequality in China.

Dynamics of the growth–inequality nexus in China: roles of surplus labor, openness, education, and technical change in province-panel analysis

The paper examines the complex interrelationship between economic growth and the urban–rural income inequality in China by estimating a simultaneous equation system. This study uses a panel data-set that covers 29 provinces from 1988 to 2007, and compares the earlier period with the later period. It finds a robust and positive impact of the rural surplus labor on urban–rural inequality, which is consistent with Lewis’ dual economy theory. Economic growth is found to aggravate the urban–rural inequality in the earlier period, but there is no hard evidence in the later period. This implies that China has not yet, or at least by 2007, entered the second stage of the Kuznets curve. We also find no robust evidence on the impact of the inequality on growth in either period, but find robust evidence on the impact of both foreign direct investment and exports on the increasing inequality during the earlier period, whereas no significant impact in the later period is found. Finally, the spread of education reduced the inequality in the earlier period, but no such impact is robust in the later period.

Impacts of Migration and Remittances on Ethnic Income Inequality in Rural China

This paper examines the impacts of migration and migrants’ remittances on household income in China’s rural minority areas using recent proprietary household data. Treating migrants’ remittances as a potential substitute for income, the results reveal that migration significantly boosts income for all ethnic groups, although the returns to ethnic minority households tend to be less than for Han households. Decomposition analyses further reveal that migration increases inequality between ethnic groups despite reducing spatial inequality, and that the percentage contribution of ethnic inequality to total inequality is larger than that of spatial inequality across sampled rural locations.

Income inequality and mobility of rural households in China from 2003 to 2006

Purpose– This paper aims to illustrate the trends of income growth and income inequality and examines the dynamics and determinants of income mobility in rural China from 2003 to 2006.Design/methodology/approach– The authors decomposed the Gini coefficient by different sources and analyzed income mobility using the method of income transition matrix. The authors then estimated the effects of demographic variables, labor migration, and other household characteristics on income growth using a dynamic panel data model.Findings– The study obtained important findings on income mobility and income inequality in rural China. First, annual income inequality in rural China was smoothed during this period after a decline from 2003, with the largest contribution from the income of migration work. Second, income mobility remained rather stable and relatively high, with higher mobility in the interior provinces than in the coastal provinces. Third, the income levels of the poor and the wealthy households converged during this period after controlling other factors. Fourth, income growth depends on in the households' demographic composition, their human capital accumulation, and their chances of getting migration jobs.Originality/value– The sound econometric methods applied to the most current rural household survey data provide important contributions to the literature of income inequality and income mobility in China.

Did the Key Priority Forestry Programs affect income inequality in rural China?

The Natural Forest Protection Program, the Sloping Land Conversion Program and the Desertification Combating Program around Beijing and Tianjing have been gradually launched since 1998 for ecosystem restoration. A large number of rural households have been enrolled in these programs, and the Government of China has designed different polices for these programs, such as subsidies and forbidden or restricted uses. How and how much these programs and policies have affected rural households’ inequality are urgent questions to be answered. The paper used a unique panel data of 1458 sample rural households from 15 counties in China to examine the direct and overall contributions of the Key Priority Forestry Programs (KPFPs) to rural households’ total income inequality. A fixed-effects model was used to estimate the impact of the KPFPs on land-based income and off-farm income. Our empirical results indicate that the direct contribution and overall (including direct and indirect) contribution have experienced a inverted U-shape. Specifically, the overall contributions of the KPFPs’ subsidies to income inequality were less pronounced than that of the direct effects. Furthermore, both the direct contributions and overall contributions to total income inequality changed over time during the study period and differed from one county to another.

ANALYSIS OF THE DETERMINANTS OF INCOME AND INCOME GAP BETWEEN URBAN AND RURAL CHINA

This paper studies the determinants of income and urban–rural income gap to shed light on the problem of urban–rural income inequality in China. Ordinary least square (OLS), conditional quantile regression and Blinder–Oaxaca decomposition methods are used to analyze four waves of the China Health and Nutrition Survey (CHNS) household data. Results show that education and occupation are essential determinants of households' income level. These two factors exert heterogeneous effects at different percentiles of income distribution. In urban areas, education is more valued for high income earners, while for rural areas, specialized or tertiary education are more beneficial for the poorer households. Among all occupational types, farm activities show much lower returns than other types; and this is more evident for individuals at the left tail of the income distribution. We also find that for the sampled provinces, urban–rural income gap increases from year 2000 to 2004 but the gap decreases from 2004 to 2009. The income gap can be largely explained by the individuals' attributes, especially by the level of education and type of occupation.

Land titling in China: Chengdu experiment and its consequences

The lack of transfer rights for collectively owned land has led to inefficient land use and rising urban–rural income inequality in China, which calls for property rights reform in the rural area. This article studies the land titling experiment in Chengdu since 2008. Based on field surveys and analysis of data on land transactions, we find that rural residents' income and wealth increased significantly after achieving transfer rights on collectively owned land. The implied land price is found to be correlated with the strength of property rights. With land titling, the market for rural construction land is growing in Chengdu. We argue that a property rights reform that changes the primary role of rural land from welfare to property will provide China with an opportunity to achieve urban–rural harmony and land-use efficiency while maintaining its fast urbanization process.

The Factors Contributing to Income Inequality in Rural China: Analysis Using the Existing Public Data and Household Survey Data in Sichuan Province

The Factors Contributing to Income Inequality in Rural China: Analysis Using the Existing Public Data and Household Survey Data in Sichuan Province

Income inequality dynamics in rural China from 1991 to 2006: the role of alternative income sources

This article decomposes income inequality in rural China into five income sources and studies the marginal effect of each income source on total income inequality. We find that rising wage income and declining agricultural income play important roles in the rapid increase of income inequality in rural China from 1991 to 2006. Only increases in agricultural income appear to reduce total income inequality. China has recently eliminated taxes on agricultural income. These findings suggest that such a policy will help reduce income inequality in rural China.

The impact of agricultural technology adoption on income inequality in rural China: Evidence from southern Yunnan Province

Abstract This study analyzes the impact on income inequality of government efforts to increase agricultural incomes in rural China. It collects and analyzes survey data from 473 households in Yunnan, China in 2004. In particular, it investigates the effects of government efforts to promote improved upland rice technologies. Our analysis shows that farmers who adopted these technologies had incomes approximately 15% higher than non-adopters. Despite this relatively large increase, we estimate that the impact on income inequality was relatively slight. This is primarily due to the fact that lower-income farmers adopted the improved rice technology at rates that were roughly equivalent to those of higher-income farmers.