Analysis of the Determinants of Income and Income Gap between Urban and Rural China
AbstractThis paper studies on the determinants of income and urban-rural income gap to shed light on the problem of urban-rural income inequality in China. OLS, conditional quantile regression and Blinder-Oaxaca decomposition methods are used to analyze four waves of the China Health and Nutrition Survey (CHNS) household data. Results show that education and occupation are essential determinants of households' income level. These two factors exert heterogeneous effects at different percentiles of the income distribution. In urban areas, education is more valued for high income earners, while for rural areas, specialized or tertiary education are more beneficial for the poorer households. Among all occupational types, farm activities show much lower returns than other types; and this is more evident for individuals at the left tail of the income distribution. We also find that for the sampled provinces, urban-rural income gap increases from the year of 2000 to 2004 but the gap decreases from 2004 to 2009. The income gap can be largely explained by the individuals' attributes, especially by level of education and type of occupation.
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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7162.
Length: 28 pages
Date of creation: Jan 2013
Date of revision:
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Find related papers by JEL classification:
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-02-16 (Agricultural Economics)
- NEP-ALL-2013-02-16 (All new papers)
- NEP-DEV-2013-02-16 (Development)
- NEP-LMA-2013-02-16 (Labor Markets - Supply, Demand, & Wages)
- NEP-PBE-2013-02-16 (Public Economics)
- NEP-TRA-2013-02-16 (Transition Economics)
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.:
- Macpherson, David A & Hirsch, Barry T, 1995. "Wages and Gender Composition: Why Do Women's Jobs Pay Less?," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 426-71, July.
- 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.
- 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.
- Dwayne Benjamin & Loren Brandt & John Giles, 2003. "The Evolution of Income Inequality in Rural China," Working Papers benjamin-04-01, University of Toronto, Department of Economics.
- Putterman, Louis, 1992. "Dualism and Reform in China," Economic Development and Cultural Change, University of Chicago Press, vol. 40(3), pages 467-93, April.
- Dennis Tao Yang & Hao Zhou, 1999.
"Rural-urban disparity and sectoral labour allocation in China,"
Journal of Development Studies,
Taylor & Francis Journals, vol. 35(3), pages 105-133.
- Yang, Dennis T. & Hao Zhou, 1997. "Rural-Urban Disparity and Sectoral Labor Allocation in China," Working Papers 97-02, Duke University, Department of Economics.
- Wei, Shang-Jin & Wu, Yi, 2001.
"Globalization and Inequality: Evidence from within China,"
CEPR Discussion Papers
3088, C.E.P.R. Discussion Papers.
- Shang-Jin Wei & Yi Wu, 2001. "Globalization and Inequality: Evidence from Within China," NBER Working Papers 8611, National Bureau of Economic Research, Inc.
- Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
- John Knight & Lina Song, 2003. "Increasing urban wage inequality in China," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(4), pages 597-619, December.
- Dennis Tao Yang, 1999. "Urban-Biased Policies and Rising Income Inequality in China," American Economic Review, American Economic Association, vol. 89(2), pages 306-310, May.
- Heshmati, Almas, 2004. "Regional Income Inequality in Selected Large Countries," IZA Discussion Papers 1307, Institute for the Study of Labor (IZA).
- Kanbur, Ravi & Zhang, Xiaobo, 2004.
"Fifty Years of Regional Inequality in China: A Journey through Central Planning, Reform, and Openness,"
Working Paper Series
UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- 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, vol. 9(1), pages 87-106, 02.
- Ravi Kanbur & Xiaobo Zhang, 2004. "Fifty Years of Regional Inequality in China: A Journey Through Central Planning, Reform and Openness," Working Papers 158, Institute for Social and Economic Change, Bangalore.
- Sylviane Guillaumont Jeanneney & Ping Hua, 2008. "Appreciation of the Renminbi and Urban-Rural Income Disparity in China," Revue d’économie du développement, De Boeck Université, vol. 22(5), pages 67-92.
- Constant, Amelie & Meng, Jingzhou & Tien, Bienvenue & Zimmermann, Klaus F, 2011.
"China's Latent Human Capital Investment: Achieving Milestones and Competing for the Top,"
CEPR Discussion Papers
8376, C.E.P.R. Discussion Papers.
- Constant, Amelie F. & Tien, Bienvenue N. & Zimmermann, Klaus F. & Meng, Jingzhou, 2011. "China's Latent Human Capital Investment: Achieving Milestones and Competing for the Top," IZA Discussion Papers 5650, Institute for the Study of Labor (IZA).
- Sicular, Terry & Yue, Ximing & Gustafsson, Bjorn & Li, Shi, 2006.
"The Urban-Rural Income Gap and Inequality in China,"
Working Paper Series
RP2006/135, World Institute for Development Economic Research (UNU-WIDER).
- Terry Sicular & Yue Ximing & Björn Gustafsson & Li Shi, 2007. "The Urban-Rural Income Gap And Inequality In China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(1), pages 93-126, 03.
- Xin Meng, 1998. "Gender occupational segregation and its impact on the gender wage differential among rural-urban migrants: a Chinese case study," Applied Economics, Taylor & Francis Journals, vol. 30(6), pages 741-752.
- Björn Gustafsson & Shi Li, 2000. "Economic transformation and the gender earnings gap in urban China," Journal of Population Economics, Springer, vol. 13(2), pages 305-329.
- Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
- Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-79, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.