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Beyond Kuznets: persistent regional inequality in China

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  • Christopher Candelaria
  • Mary Daly
  • Galina Hale

Abstract

Regional inequality in China appears to be persistent and even growing in the past two decades. We study potential offsetting factors and interprovincial migration to shed light on the sources of this persistence. We find that some of the inequality could be attributed to differences in quality of labor, industry composition, and geographical location of provinces. We also demonstrate that interprovincial migration, while driven in part by wage differences across provinces, does not offset these differences. Finally, we find that interprovincial redistribution did not help offset regional inequality during our sample period.

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Bibliographic Info

Paper provided by Federal Reserve Bank of San Francisco in its series Working Paper Series with number 2009-07.

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Date of creation: 2009
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Handle: RePEc:fip:fedfwp:2009-07

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Keywords: Income distribution ; China;

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References

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  1. Tianlun Jian & Jeffrey D. Sachs & Andrew M. Warner, 1996. "Trends in Regional Inequality in China," NBER Working Papers 5412, National Bureau of Economic Research, Inc.
  2. Jian, Tianlun & Sachs, Jeffrey D. & Warner, Andrew M., 1996. "Trends in regional inequality in China," China Economic Review, Elsevier, vol. 7(1), pages 1-21.
  3. John Whalley & Shunming Zhang, 2004. "Inequality Change in China and (Hukou) Labour Mobility Restrictions," NBER Working Papers 10683, National Bureau of Economic Research, Inc.
  4. Ravi Kanbur & Xiaobo Zhang, 2005. "Fifty Years of Regional Inequality in China: a Journey Through Central Planning, Reform, and Openness," Review of Development Economics, Wiley Blackwell, Wiley Blackwell, vol. 9(1), pages 87-106, 02.
  5. Patricia Rice & Anthony Venables, 2003. "Equilibrium Regional Disparities: Theory and British Evidence," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 37(6-7), pages 675-686.
  6. Bound, John & Holzer, Harry J, 2000. "Demand Shifts, Population Adjustments, and Labor Market Outcomes during the 1980s," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 18(1), pages 20-54, January.
  7. William Lavely, 2001. "First Impressions from the 2000 Census of China," Population and Development Review, The Population Council, Inc., The Population Council, Inc., vol. 27(4), pages 755-769.
  8. Meng, Xin & Gregory, Bob & Wang, Youjuan, 2005. "Poverty, Inequality, and Growth in Urban China, 1986-2000," IZA Discussion Papers 1452, Institute for the Study of Labor (IZA).
  9. Huber, Peter, 2006. "Regional labor market developments in transition," Policy Research Working Paper Series 3896, The World Bank.
  10. Christopher Candelaria & Mary Daly & Galina Hale, 2009. "Interprovincial inequality in China," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue apr10.
  11. Kanbur, Ravi & Zhang, Xiaobo, 1999. "Which Regional Inequality? The Evolution of Rural-Urban and Inland-Coastal Inequality in China from 1983 to 1995," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 686-701, December.
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Cited by:
  1. Fu, Yuming & Gabriel, Stuart A., 2012. "Labor migration, human capital agglomeration and regional development in China," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 473-484.
  2. Chen, Anping & Groenewold, Nicolaas, 2013. "Does investment allocation affect the inter-regional output gap in China? A time-series investigation," China Economic Review, Elsevier, vol. 26(C), pages 197-206.
  3. Nicolas Ziebarth, 2013. "Are China and India Backwards? Evidence from the 19th Century U.S. Census of Manufactures," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 86-99, January.
  4. Capello, Marcelo & Figueras, Alberto & Freille, Sebastian & Moncarz, Pedro, 2013. "The role of federal transfers in regional convergence in human development indicators in Argentina," Investigaciones Regionales, Asociación Española de Ciencia Regional, Asociación Española de Ciencia Regional, issue 27, pages 33-63.
  5. Theresa M. Greaney & Yao Li, 2013. "Trade, Foreign Direct Investment and Wage Inequality in China: A Heterogeneous Firms Approach," Working Papers, University of Hawaii at Manoa, Department of Economics 201306, University of Hawaii at Manoa, Department of Economics.
  6. Muqun Li & Ian Coxhead, 2010. "Trade And Inequality With Limited Labor Mobility: Theory And Evidence From China," ISER Discussion Paper 0780, Institute of Social and Economic Research, Osaka University.
  7. Raul Silveira Neto & Carlos Azzoni, 2011. "Measuring the Contribution of Social Policies to Regional Inequality Dynamic in Brazil," ERSA conference papers ersa11p659, European Regional Science Association.
  8. Basco, Sergi & Mestieri, Martí, 2013. "Heterogeneous trade costs and wage inequality: A model of two globalizations," Journal of International Economics, Elsevier, vol. 89(2), pages 393-406.
  9. Nicolas Ziebarth, 2011. "Are China and India Backwards? Evidence from the 19th Century U.S. Census of Manufactures," 2011 Meeting Papers 138, Society for Economic Dynamics.

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