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Nonagricultural Employment Determinants and Income Inequality Decomposition

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Author Info
Xiaoyun Liu
Terry Sicular

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Abstract

Nonagricultural income has become an important source of rural household income in China and has brought about wide inequality in rural areas. This paper investigates the determinants of nonagricultural employment and income and how they contribute to income inequality using the China Household Income Project (CHIP) 2002 survey data and a three-step decomposition approach. Our results indicate that educational inequality accounts for 9 percent and 36 percent, respectively, of wage and self-employment income inequality, implying that educational inequality plays a substantial role in nonagricultural income inequality. The results also show that community characteristics explain much inequality in wage and self-employment income, indicating that local development is important in the determination of nonagricultural income inequality.

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Publisher Info
Article provided by M.E. Sharpe, Inc. in its journal Chinese Economy.

Volume (Year): 42 (2009)
Issue (Month): 4 (July)
Pages: 29-43
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Handle: RePEc:mes:chinec:v:42:y:2009:i:4:p:29-43

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  1. Christofides, Louis N. & Pashardes, Panos, 2002. "Self/paid-employment, public/private sector selection, and wage differentials," Labour Economics, Elsevier, vol. 9(6), pages 737-762, December. [Downloadable!] (restricted)
  2. Du, Yang & Park, Albert & Wang, Sangui, 2005. "Migration and rural poverty in China," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 688-709, December. [Downloadable!] (restricted)
  3. Fields, Gary S & Yoo, Gyeongjoon, 2000. "Falling Labor Income Inequality in Korea's Economic Growth: Patterns and Underlying Causes," Review of Income and Wealth, Blackwell Publishing, vol. 46(2), pages 139-59, June.
  4. Wan, Guanghua, 2004. "Accounting for income inequality in rural China: a regression-based approach," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 348-363, June. [Downloadable!] (restricted)
  5. meng, xin & wu, harry, 1994. "Household Income Determination and Regional Income Differential in Rural China," MPRA Paper 1345, University Library of Munich, Germany. [Downloadable!]
  6. Jonathan Morduch & Terry Sicular, 2002. "Rethinking Inequality Decomposition, With Evidence from Rural China," Economic Journal, Royal Economic Society, vol. 112(476), pages 93-106, January. [Downloadable!] (restricted)
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  7. Zhang, Linxiu & Rozelle, Scott & Huang, Jikun, 2001. "Off-Farm Jobs and On-Farm Work in Periods of Boom and Bust in Rural China," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 505-526, September. [Downloadable!] (restricted)
  8. John Knight & Lina Song, 2003. "Chinese Peasant Choices: Migration, Rural Industry or Farming," Oxford Development Studies, Taylor and Francis Journals, vol. 31(2), pages 123-148. [Downloadable!] (restricted)
  9. Kai-yuen, Tsui, 1998. "Trends and Inequalities of Rural Welfare in China: Evidence from Rural Households in Guangdong and Sichuan," Journal of Comparative Economics, Elsevier, vol. 26(4), pages 783-804, December. [Downloadable!] (restricted)
  10. Puhani, Patrick A, 2000. " The Heckman Correction for Sample Selection and Its Critique," Journal of Economic Surveys, Blackwell Publishing, vol. 14(1), pages 53-68, February. [Downloadable!] (restricted)
  11. Benjamin, Dwayne & Brandt, Loren & Giles, John, 2005. "The Evolution of Income Inequality in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 53(4), pages 769-824, July.
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This page was last updated on 2009-11-22.

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