IDEAS home Printed from https://ideas.repec.org/a/bla/agecon/v44y2013is1p151-162.html
   My bibliography  Save this article

The human capital roots of the middle income trap: the case of China

Author

Listed:
  • Linxiu Zhang
  • Hongmei Yi
  • Renfu Luo
  • Changfang Liu
  • Scott Rozelle

Abstract

China, like other middle income countries, is facing the challenges of the next stage of development as its leaders seek to guide the nation into becoming a high income country. At this same point of development, however, other countries have faltered, raising the possibility of stagnation or collapse. The stagnation of growth after reaching a level of income high enough to be call “middle income” is a phenomenon which some observers call the Middle Income Trap. In this paper we explore one of the major challenges that nations, including China, must face in the transition from middle to high income: the management of inequality. In particular, we explore the possible roots of future inequality that is associated with a nation’s underinvestment in the human capital of broad segments of its population. To meet this goal we first look at several benchmarks of successful transitions from middle to high income (e.g., the case of South Korea) and not-so-successful transitions (Mexico). We then exam more systematically the characteristics of countries that have successfully transitioned (or graduated) from middle to high income (Graduates) and those that are attempting to do so now (Aspirees). With this background, we describe the challenges that China faces in the light of rising wage rates and highly unequal income distribution today. We also document the high levels of human capital inequality in China today, a harbinger of high future inequality. In discussing the sources of the human capital inequality, in addition to the structural and institutional barriers that are discouraging many students (and their parents) from staying in school to achieve the levels of learning that we believe are necessary for preparing individuals for employment in the coming decades, we also identify severe nutritional and health problems. We believe that these nutrition and health problems, unless addressed, are creating serious China’s human capital deficiencies in poor areas of rural C
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Linxiu Zhang & Hongmei Yi & Renfu Luo & Changfang Liu & Scott Rozelle, 2013. "The human capital roots of the middle income trap: the case of China," Agricultural Economics, International Association of Agricultural Economists, vol. 44(s1), pages 151-162, November.
    • Handle: RePEc:bla:agecon:v:44:y:2013:i:s1:p:151-162
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/agec.2013.44.issue-s1
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Yusuf , Shahid & Nabeshima, Kaoru, 2009. "Can Malaysia escape the middle-income Trap ? a strategy for Penang," Policy Research Working Paper Series 4971, The World Bank.
    2. Gustavo J. Bobonis & Edward Miguel & Charu Puri-Sharma, 2006. "Anemia and School Participation," Journal of Human Resources, University of Wisconsin Press, vol. 41(4).
    3. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    4. Xiaobing Wang & Chengfang Liu & Linxiu Zhang & Renfu Luo & Thomas Glauben & Yaojiang Shi & Scott Rozelle & Brian Sharbono, 2011. "What is keeping the poor out of college?: Enrollment rates, educational barriers and college matriculation in China," China Agricultural Economic Review, Emerald Group Publishing, vol. 3(2), pages 131-149, May.
    5. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, March.
    6. Liu, Chengfang & Zhang, Linxiu & Luo, Renfu & Wang, Xiaobing & Rozelle, Scott & Sharbono, Brian & Adams, Jennifer & Shi, Yaojiang & Yue, Ai & Li, Hongbin & Glauben, Thomas, 2011. "Early commitment on financial aid and college decision making of poor students: Evidence from a randomized evaluation in rural China," Economics of Education Review, Elsevier, vol. 30(4), pages 627-640, August.
    7. Raj Nallari & Shahid Yusuf & Breda Griffith & Rwitwika Bhattacharya, 2011. "Frontiers in Development Policy : A Primer on Emerging Issues," World Bank Publications, The World Bank, number 2350.
    8. Singh, Lakhwinder, 2004. "Technological Progress, Structural Change and Productivity Growth in Manufacturing Sector of South Korea," MPRA Paper 99, University Library of Munich, Germany.
    9. Xinxin Chen & Yaojiang Shi & Di Mo & James Chu & Prashant Loyalka & Scott Rozelle, 2013. "Impact of a Senior High School Tuition Relief Program on Poor Junior High School Students in Rural China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 21(3), pages 80-97, May.
    10. Gordon H. Hanson & Ann Harrison, 1999. "Trade Liberalization and Wage Inequality in Mexico," ILR Review, Cornell University, ILR School, vol. 52(2), pages 271-288, January.
    11. Adam Wagstaff & Winnie Yip & Magnus Lindelow & William C. Hsiao, 2009. "China's health system and its reform: a review of recent studies," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages 7-23, July.
    12. Khan, Azizur Rahman & Riskin, Carl, 2001. "Inequality and Poverty in China in the Age of Globalization," OUP Catalogue, Oxford University Press, number 9780195136494.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fang Chang & Wenbin Min & Yaojiang Shi & Kaleigh Kenny & Prashant Loyalka, 2016. "Educational Expectations and Dropout Behavior among Junior High Students in Rural China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(3), pages 67-85, May.
    2. Tyers, Rod, 2014. "Looking inward for transformative growth," China Economic Review, Elsevier, vol. 29(C), pages 166-184.
    3. Otsuka, Keijiro & Higuchi, Yuki & Sonobe, Tetsushi, 2017. "Middle-income traps in East Asia: An inquiry into causes for slowdown in income growth," China Economic Review, Elsevier, vol. 46(S), pages 3-16.
    4. Gao, Qiufeng & Wang, Huan & Mo, Di & Shi, Yaojiang & Kenny, Kaleigh & Rozelle, Scott, 2018. "Can reading programs improve reading skills and academic performance in rural China?," China Economic Review, Elsevier, vol. 52(C), pages 111-125.
    5. Bai, Yunli & Zhang, Linxiu & Yi, Hongmei & Zheng, Liming & Rozelle, Scott, 2017. "The Impact of an Academic High School Tuition Relief Program on Students’ Matriculation into High Schools in Rural China," China Economic Review, Elsevier, vol. 43(C), pages 16-28.
    6. Xuefeng Zhan & Shaoping Li & Chengfang Liu & Linxiu Zhang, 2014. "Effect of Migration on Children's Self-esteem in Rural China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 22(4), pages 83-101, July.
    7. Gill,Indermit S. & Kharas,Homi, 2015. "The middle-income trap turns ten," Policy Research Working Paper Series 7403, The World Bank.
    8. Shenggen Fan & Ravi Kanbur & Shang-Jin Wei & Xiaobo Zhang, 2013. "The Economics of China: Successes and Challenges," NBER Working Papers 19648, National Bureau of Economic Research, Inc.
    9. Song, Yang, 2014. "What should economists know about the current Chinese hukou system?," China Economic Review, Elsevier, vol. 29(C), pages 200-212.
    10. Li, Lili & Huang, Lei & Shi, Yaojiang & Luo, Renfu & Yang, Meredith & Rozelle, Scott, 2018. "Anemia and student's educational performance in rural Central China: Prevalence, correlates and impacts," China Economic Review, Elsevier, vol. 51(C), pages 283-293.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:agecon:v:44:y:2013:i:s1:p:151-162. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley Content Delivery). General contact details of provider: http://edirc.repec.org/data/iaaeeea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.