Rural Income Inequality Research Articles

The Misestimation of Urban‒Rural Income Inequality in China

The Misestimation of Urban‒Rural Income Inequality in China

Farmland rental participation, livelihood capital, and rural income inequality: evidence from rural China

ABSTRACT Using data from the China Family Panel Studies through a national rural survey, we analysed the effects of farmland rental participation and five types of livelihood capital on rural household income. We considered different livelihood strategies and applied the sustainable livelihood framework. Additionally, we used a regression-based Shapley-value decomposition method to examine how farmland rental participation and livelihood capital contribute to the rural income gap. Additionally, we investigated whether farmland rental participation is beneficial in reducing rural income inequality. The results show that farmland rental participation can lead to income benefits for the vast majority of farmers. Furthermore, farmland rental participation is not a primary factor contributing to the rural income gap. Household physical, human, and financial capital emerge as the three factors significantly influencing the income gap. The quantile regression results indicate that providing reasonable guidance to the farmland rental market is beneficial for narrowing the rural income gap. Implementing proactive policies aimed at enhancing the human, financial, and social capital of farmers can theoretically contribute to narrowing the rural income inequality.

Digital Financial Literacy and Rural Income Inequality

Digital Financial Literacy and Rural Income Inequality

Does rural transformation affect rural income inequality? Insights from cross-district panel data analysis in Bangladesh

Rural transformation plays a crucial role in enhancing the income and employment prospects of the rural labor force. We investigate the effects of rural transformation on rural income inequality at the district level in Bangladesh using data from five years of nationally representative Household Income and Expenditure Surveys. The Gini coefficient is used to measure rural income inequality. In contrast, the share of high-value agricultural outputs and the share of rural non-farm employment are used as indicators of rural transformation. We find that rural income inequality is positively associated with the share of high-value agricultural outputs and the share of rural non-farm employment. The non-linear regression result shows an inverted U-shaped relationship between rural transformation and income inequality, which indicates that income inequality initially increases with rural transformation but decreases in the long run. Additionally, we find that rural income inequality is positively correlated with the proportion of household education expenditures, agricultural rental activity, and the share of remittances. This study also reveals that income inequality in rural areas of Bangladesh has a significant negative correlation with the government's social safety net program.

WELFARE AND RURAL WELL-BEING IN POST MAO CHINA (1978-88): A DEBATE

During the first decade of reform (1978-88) there was an impressive economic growth, change in the output growth pattern, shift in the structure of employment, and rise in the income and consumption level of the peasants. The number of those in absolute poverty declined significantly, though rural income inequality, both regionally and intra regionally, even at the village level increased significantly. In this context the question arises: did the growth of income and output per head due to economic reforms accompany a similarly improved performance with regard to non -income indicators of well -being? Based on available literature on rural reforms in post Mao China, this paper examines the debate on the above question. This question assumes importance because China in the pre-reform period had brought remarkable improvements in living conditions including the expansion of life expectancy, reduction infant mortality and illiteracy even with the slow and low growth in per capita income. From the Nolan and Sen it emerges that while policy and institutional changes meant for raising economic growth as well as per capita income were remarkably successful, the same instruments, however, undermined the public provisioning of social goods and services and affected the length and quality of' life of peasants in poorer households for whom market medicated access to health services were proving increasingly difficult. But while the pre-reform Maoist period, had strong egalitarian distributive mechanism in place, the welfare standards and quality of services were too low.

INCOME INEQUALITY OF RURAL HOUSEHOLDS IN POLAND – ANALYSIS BY SOURCE OF INCOME

Rural households live on income much lower than the national average and experience income inequality much higher than the general population. This excess inequality is primarily due to the internal heterogeneity caused by the different nature of household income sources. The purpose of the study was then to assess the level of rural household income inequality and to decompose the inequality index by the main sources of income. The chosen inequality index was Theil-T. The research drew on unidentifiable microdata from the Household Budget Survey conducted by the CSO in 2019-2021.The study found that rural household inequality was slightly higher than that of all Polish households over the analyzed period. Among the various income-source groups, the highest inequality affected farmer households. This group also contributed most to the overall level of inequality in rural areas (44% in 2019 and over 46% in 2021). The pandemic saw an increase in inequality for all identified groups of rural households (the largest – for farmer households) and a decrease in between-group inequality.

Internet use and rural income inequality: evidence from China

The integration of the digital transformation of agriculture and China’s ‘dual-carbon’ strategy for agriculture is new momentum for developing agriculture, reducing rural income inequality, and improving the subjective well-being of farm households. This paper uses data from the China Family Panel Studies (CFPS) in 2014, 2016, and 2018 to examine the impact of internet use on rural income inequality at the household level. The results show that internet use can significantly reduce rural income inequality by enhancing information availability and farm households’ nonfarm employment level. The results of a heterogeneity analysis reveal that the internet is more conducive to improving the income inequality of rural burdened families and families in Western China. Further analysis shows that improving income inequality can enhance the subjective well-being of farmer households. Accelerating the construction of digital villages, building internet skills cultivation systems, and focusing on the utility of internet use among vulnerable rural groups can reduce rural income inequality.

The Impact of Climate Change on the Urban–Rural Income Gap in China

Based on the annual average climate data and economic and social data from 262 prefecture-level cities in China from 2001 to 2019, this paper explores the impact of climate change on urban–rural income inequality and its mechanisms using fixed-effects (FEs) and mediated-effects (MEs) models. This study finds that (1) climate change has an inverted U-shaped relationship with the urban–rural income disparity; (2) climate change can affect the urban–rural income disparity by influencing urban and rural income levels, the regional degree of urbanization, and the labor force employment structure; (3) the impact of climate change on the urban–rural income gap is heterogeneous in East, Center, and West China; and (4) extreme heat can widen the urban–rural income gap, and extreme drought can narrow the urban–rural income gap. Climate change has a significant impact on the urban–rural income gap, and there is a need to continue to promote urbanization and the optimization of the employment structure of the workforce, reduce the vulnerability of rural residents to climate change, and narrow the urban–rural income gap.

The Impact of Digital Economy on Urban-Rural Income Gap: A Case Study of Anhui Province

Based on the panel data of 16 prefecture-level cities in Anhui Province from 2011 to 2020, the entropy method was used to measure the digital economy development index of Anhui Province, and the dual-fixed effect model was used to explore the impact of digital economy on urban-rural income gap in Anhui province. The results show that: (1) Hefei, Wuhu and Fuyang have a higher level of digital economy development, while Chizhou, Tongling and Huangshan have a lower level of digital economy development; (2) At present, the development of digital economy in Anhui Province will significantly reduce the income inequality between urban and rural areas, and the development of digital economy in Anhui Province will cause a nonlinear U-shaped influence on the income inequality between urban and rural areas; (3) The level of urbanization and the intensity of government intervention will significantly reduce urban and rural income inequality.

Development of Platform Economy and Urban–Rural Income Gap: Theoretical Deductions and Empirical Analyses

Against the historical background of the burgeoning platform economy and the promotion of common prosperity, this paper focuses on the impact of the development of the platform economy on the urban–rural income gap. Theoretical mechanism analyses are conducted from three aspects such as nonlinear action of the platform economy on the urban–rural income gap, the rural human capital level-based moderating effect, and the spatial spillover effect. Moreover, empirical analyses are carried out using the threshold model, interaction model, and spatial lag model in turn with panel data of 31 provinces in China from 2013 to 2020. The results of the study show that there is a significant double threshold effect of the development of the platform economy on the urban–rural income gap. The initial development of the platform economy can improve urban–rural income inequality, and the scale effect of the platform will further contribute to the reduction in the urban–rural income gap, but the expansion of market share and the deepening of monopoly will have a suppressive effect on the urban–rural equilibrium. There is a moderating effect of rural human capital in the platform economy in reducing urban–rural income inequality. The increase in the level of rural human capital will enhance the driving effect of the platform economy on the reduction in the rural–urban income gap. There are spatial spillover effects for the impacts of the platform economy on the urban–rural income gap and it positively promotes the coordinated development of urban and rural areas in neighboring provinces. Based on the above results, this paper makes policy proposals from three aspects such as perfecting the system and standard of the platform, improving the rural human capital level, and optimizing platform-based regional cooperation.

THE EFFECT OF VILLAGE FUNDS AND INFRASTRUCTURE ON RURAL INCOME INEQUALITY AMONG PROVINCIAL GOVERNMENTS IN SOUTHERN SUMATERA

The purpose of this study was to determine the effect of village funds and infrastructure on income inequality between provincial governments in Southern Sumatera. This study uses a panel data regression model, the data used are secondary data from 2015 to 2020. The data used in this study are time series data obtained from Badan Pusat Statistik (BPS), Ministry of Finance, Ministry of Public Works and Housing People (PUPR) and other related agencies. Based on research and data processing, the best panel data regression model is the fixed effect model. The results of the F-statistical test show that the variables of village funds, road infrastructure, electricity ratios, and cellular telephone ownership jointly reduce income inequality between villages between provincial governments in Southern Sumatera significantly. Meanwhile, based on the statistical results of the t-test, only household cell phone ownership has no significant effect on rural income inequality.

Exploring the heterogeneous impact of road infrastructure on rural residents’ income: Evidence from nationwide panel data in China

Countries have invested in transport infrastructure and public service in recent years to reduce rural poverty and income inequality. However, the effects of transport infrastructure on the residents with economic and educational disadvantages in rural areas are still under debate. In this paper, we investigate the impact of road infrastructure on the income of rural residents at the municipal level using data from the China Family Panel Survey (CFPS) from 2010 to 2018. By using the instrumental variable regression model, we found that rural residents' household incomes benefit from road infrastructure. Within income components, road infrastructure plays a role in improving rural residents’ wage and business income. Further comparing different rural resident groups, we found that rural residents with lower initial farming and business income benefit more from improved road infrastructure in terms of their farming and business income from 2010 to 2018. In addition, in poverty-stricken areas, rural residents with lower initial farming and business income benefit more from road infrastructure in improving their farming and business income. However, the household incomes of rural residents with low formal education improve less as a result of road infrastructure. Policymakers should thus consider combining transport infrastructure provision with other policy packages, such as education program or skill training, to target different groups of rural residents in China.

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.

The Impact of FDI on China’s Urban–Rural Income Gap

Since the reform and opening up some forty years ago, China has suffered from a capital shortage problem. To both solve this problem and satisfy its economic and social needs, China has been bringing in foreign investment, much of which has gone toward economic reconstruction. However, with the continuous inflow of foreign direct investment (FDI) into China, not only has the gap between rich and poor become increasingly wide but, due to China’s unique dualistic economic structure, the gap between urban and rural areas also appears to be widening. This aspect of the problem has attracted the attention of scholars around the world, as it may affect the future sustainable development of China’s economy and society. Cognizant of the need for practical solutions, this study conducts a more in-depth study of the relationship between foreign direct investment and the urban–rural income gap in China. Based on a review of previous studies and panel data from 30 Chinese provinces, this paper argues that FDI will affect this income gap through mechanisms such as employment structure, industrial structure and international trade. The findings of this study suggest that FDI inflows will first improve income inequality between urban and rural Chinese at a point in time but then have a worsening effect. In addition, China’s three major economic zones are examined, with results showing that the overall impact of FDI on the urban–rural income gap in China displays an inverted ‘U’ curve. Today, the impact of FDI on the urban–rural income gap is on the right-hand side of the curve, with regional differences in its impact. Urban–rural income inequality in the eastern region responds the most to FDI.

The Dynamic Effects of Urban–Rural Income Inequality on Sustainable Economic Growth under Urbanization and Monetary Policy in China

Income inequality in China has become increasingly serious since the beginning of the economic reform period in the 1970s, with urban–rural income inequality playing a large role. Urbanization policy and monetary policy are currently important economic policy tools for the Chinese government. In order to investigate the influence of inequality on the economy and to provide recommendations for ensuring the sustainability of growth, we study the effect of urban–rural income inequality on economic growth in the context of urbanization and monetary policy in China between 2002 and 2021. Using a flexible time-varying parametric structural vector auto-regression (TVP-VAR) model and a robust Markov chain Monte Carlo (MCMC) algorithm, our empirical results show that the effect is time-varying, with inequality promoting growth in the early years but affecting it adversely at later stages. Currently, urbanization mitigates inequality and promotes growth simultaneously, while easy monetary policy worsens inequality and affects growth adversely in the long term. We suggest that the authorities need to consider the implementation of policy rebalancing to ensure that the sustainability of economic development is not jeopardized because of worsening income disparity. Proactive urbanization policy and prudent monetary policy are viable rebalancing options.

Province- and Individual-Level Influential Factors of Depression: Multilevel Cross-Provinces Comparison in China

Rapid social change has given rise to a general increase in psychological pressure, which has led to more and more Chinese people suffering from depression over the past 30 years. Depression was influenced not only by individual factors but also by social factors, such as economy, culture, politics, etc. These social factors were measured at the national, provincial, or community levels. However, little literature reported the influence of province-level factors on the depression of Chinese. This study examined the effects of province-level and individual-level factors on depression of Chinese respondents aged 16–97 years. We conducted a multilevel analysis of the 2018 wave survey of the Chinese Family Panel Studies (CFPS), with 19,072 respondents nested within the 25 Chinese provinces. Data for the province-level were extracted from the National Bureau of Statistics of China, including three predictors: gross regional product (GRP) per capita, expenditure for social security and employment (ESSE), and rural and urban household income inequality. Depression was measured with the eight-item short version of the Center for Epidemiologic Studies Depression Scale (CES-D8). The study found that respondents who were female, 30–59 years, divorced or widowed, less educated, rural residents, less body mass index (BMI), or had lower household income tended to report higher levels of depressive symptoms. After adjustment for individual-level features, a significant effect of provinces still survived. The respondents who lived in a province with higher GRP, higher ESSE, or smaller rural and urban household income inequality reported lower depressive symptoms. Our results demonstrated that individual features did not fully explain depression. Economic and social factors appeared to impact depression and have to be considered when the government planned for improved public depression. Meanwhile, our research also provided a suggestion for the government of some provinces to investigate and improve depression.

How does town planning affect urban-rural income inequality: Evidence from China with simultaneous equation analysis

Due to the triple process of marketization, decentralization, and globalization, China has become one of the most unequal countries since the beginning of the new century. Though a huge volume of research has investigated the mechanism of China’s urban–rural income disparity, few studies have examined the influence of urban/town planning, which is regarded as a value creation tool in regional development. With a panel data of 30 provinces/municipalities in mainland China during the period 2008–2019, the paper explores the causality correlation between urban–rural income inequality and town planning. The results of Granger causality tests and the simultaneous equation model show that town planning has both direct and indirect influences on urban–rural income inequality. The impact of the government’s planning expenditure on urban–rural income inequality is positive, while that of the coverage of town planning and the size of planning staffing is negative. These findings indicate that, though China’s town planning is pro-growth orientated in the context of rapid urbanization, town planners are increasingly concerned about social equality. Therefore, we argue that town planning is an important coordination instrument for the urban–rural disparity. The local government should enhance the coverage of town planning and the education of advocacy planning as well.

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.

The impact of uptake of selected agricultural technologies on rice farmers\u2019 income distribution in Ghana

BackgroundGovernment of Ghana’s effort to reduce income inequality consistently poses a major challenge to public policy formulation. The promotion and dissemination of agricultural technologies as a pathway out of income inequality in rural Ghana have received widespread support. Yet, knowledge about the impact of agricultural technologies on rural income inequality remains low. The objective of the study is to evaluate the link between the uptake of improved rice technologies and income distribution in the study area.MethodsThis paper uses a survey data from 917 smallholder rice producers in selected communities in Ghana. The study employs the Bourguignon, Fournier, and Gurgand (BFG) selection bias correction model, a two-stage model, to empirically analyse the role of agricultural technologies in rural income distribution.ResultsThe empirical result shows that education, farm size, land ownership, participation in relevant extension training programmes enhance adoption, but gender (female) inhibits uptake of the selected technologies. The empirical result further shows that the uptake of the improved rice seed and fertilizer increases rice farmers’ net revenue significantly. The result further indicates that farmers’ choice of the selected agricultural technologies decreases the sample population income inequality, indicating the uptake of the technologies has an equalizing effect on rice farmers’ income distribution.ConclusionThe study concludes that the use of the selected technologies has potential to fight rural poverty in Ghana. The findings have implications for National Development Planning Commission (NDPC) agenda of redistribution of wealth in Ghana.