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

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  • Hai Fang
  • John Rizzo

Abstract

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.

Suggested Citation

  • Hai Fang & John Rizzo, 2011. "Income inequality dynamics in rural China from 1991 to 2006: the role of alternative income sources," Applied Economics Letters, Taylor & Francis Journals, vol. 18(14), pages 1307-1310.
    • Handle: RePEc:taf:apeclt:v:18:y:2011:i:14:p:1307-1310
    DOI: 10.1080/13504851.2010.535778
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    Cited by:

    1. Liu, Ying & Huang, Jikun & Zikhali, Precious, 2016. "The bittersweet fruits of industrialization in rural China: The cost of environment and the benefit from off-farm employment," China Economic Review, Elsevier, vol. 38(C), pages 1-10.
    2. Tsun Se Cheong & Yanrui Wu, 2013. "Globalization and Regional Inequality," Economics Discussion / Working Papers 13-10, The University of Western Australia, Department of Economics.
    3. Nitta, Atomu & Yamamoto, Yasutaka & Kondo, Katsunobu & Sawauchi, Daisuke, 2020. "Direct payments to Japanese farmers: Do they reduce rice income inequality? Lessons for other Asian countries," Journal of Policy Modeling, Elsevier, vol. 42(5), pages 968-981.
    4. Yun Xu & Xiaoping Qiu & Xueting Yang & Guojie Chen, 2018. "Factor Decomposition of the Changes in the Rural Regional Income Inequality in Southwestern Mountainous Area of China," Sustainability, MDPI, vol. 10(9), pages 1-15, September.

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