Inequality and Internal Migration in China: Evidence from Village Panel Data
AbstractThis paper analyzes the impact of rural-to-urban migration on income inequality and gender wage gap in source regions using a newly constructed panel dataset for around 100 villages over a ten-year period from 1997 to 2006 in China. Since income inequality is time-persisting, we use a system GMM framework to control for the lagged income inequality, in which contemporary emigration is also validly instrumented. We found a Kuznets (inverse U-shaped) pattern between migration and income inequality in the sending communities. Specifically, contemporary emigration increases income inequality, while lagged emigration has strong income inequalityreducing effect in the sending villages. A 50-percent increase in the lagged emigration rate translates into one-sixth to one-seventh standard deviation reduction in inequality. These effects are robust to the different specifications and different measures of inequality. More interestingly, the estimated relationship between emigration and the gender wage gap also has an inverse Ushaped pattern. Emigration tends to increase the gender wage gap initially, and then tends to decrease it in the sending villages.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Human Development Report Office (HDRO), United Nations Development Programme (UNDP) in its series Human Development Research Papers (2009 to present) with number HDRP-2009-27.
Length: 42 pages
Date of creation: Jul 2009
Date of revision: Jul 2009
Publication status: Published as background research for the 2009 Human Development Report.
Internal Migration; Inequality; System GMM;
Find related papers by JEL classification:
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-02 (All new papers)
- NEP-CNA-2010-05-02 (China)
- NEP-DEV-2010-05-02 (Development)
- NEP-MIG-2010-05-02 (Economics of Human Migration)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dwayne Benjamin & Loren Brandt & John Giles, 2004.
"The Evolution of Income Inequality in Rural China,"
William Davidson Institute Working Papers Series
2004-654, William Davidson Institute at the University of Michigan.
- David Card, 2009.
"Immigration and Inequality,"
NBER Working Papers
14683, National Bureau of Economic Research, Inc.
- Meng, Xin & Zhang, Junsen, 2001. "The Two-Tier Labor Market in Urban China: Occupational Segregation and Wage Differentials between Urban Residents and Rural Migrants in Shanghai," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 485-504, September.
- Blundell, Richard & Bond, Stephen, 1998.
"Initial conditions and moment restrictions in dynamic panel data models,"
Journal of Econometrics,
Elsevier, vol. 87(1), pages 115-143, August.
- R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
- Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
- Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
- Shahid Yusuf & Tony Saich, 2008. "China Urbanizes : Consequences, Strategies, and Policies," World Bank Publications, The World Bank, number 6337, October.
- Stark, Oded & Taylor, J. Edward & Yitzhaki, Shlomo, 1988. "Migration, remittances and inequality : A sensitivity analysis using the extended Gini index," Journal of Development Economics, Elsevier, vol. 28(3), pages 309-322, May.
- Stark, Oded & Bloom, David E, 1985. "The New Economics of Labor Migration," American Economic Review, American Economic Association, vol. 75(2), pages 173-78, May.
- de Brauw, Alan & Giles, John T., 2012.
"Migrant Labor Markets and the Welfare of Rural Households in the Developing World: Evidence from China,"
IZA Discussion Papers
6765, Institute for the Study of Labor (IZA).
- de Brauw, Alan & Giles, John, 2008. "Migrant Labor Markets and the Welfare of Rural Households in the Developing World: Evidence from China," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6085, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- de Brauw, Alan & Giles, John, 2008. "Migrant labor markets and the welfare of rural households in the developing world : evidence from China," Policy Research Working Paper Series 4585, The World Bank.
- Mckenzie, David & Rapoport, Hillel, 2007.
"Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico,"
Journal of Development Economics,
Elsevier, vol. 84(1), pages 1-24, September.
- David Mckenzie & Hillel Rapoport, 2004. "Network Effects and the Dynamics of Migration and Inequality: Theory and Evidence from Mexico," Working Papers 2004-3, Department of Economics, Bar-Ilan University.
- 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.
- Wilson, E. J. & Jayanthakumaran, K. & Verma, R., 2012.
"Demographics, Labor Mobility, and Productivity,"
ADBI Working Papers
387, Asian Development Bank Institute.
- E. J. Wilson & K. Jayanthakumaran & R. Verma, 2012. "Demographics, Labor Mobility, and Productivity," Development Economics Working Papers 23348, East Asian Bureau of Economic Research.
- E. J. Wilson & K. Jayanthakumaran & R. Verma, 2012. "Demographics, Labor Mobility, and Productivity," Labor Economics Working Papers 23348, East Asian Bureau of Economic Research.
- Ranathunga, Seetha P.B., 2011. "Impact of rural to urban labour migration and the remittances on sending household welfare: a Sri Lankan case study," MPRA Paper 35943, University Library of Munich, Germany, revised 14 Dec 2011.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (HDRO/UNDP).
If references are entirely missing, you can add them using this form.