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The long-term evolution of national income inequality and rural poverty in China

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  • Luo, Chuliang
  • Li, Shi
  • Sicular, Terry

Abstract

Using the five waves of the China Household Income Project surveys conducted during 1988–2013, we investigate long-term changes in national income inequality and rural poverty in China. National income inequality rose markedly to 2007 and thereafter fell slightly. Income growth was widely shared, but inequality increased because the high-income percentiles had faster income growth than lower percentiles and because the gap between urban and rural household incomes widened. The fall in income inequality after 2007 reflects faster income growth among low-income percentiles and the impacts of newly introduced redistributive policies. The paper also finds a considerable, ongoing poverty reduction in rural China. A poverty decomposition analysis indicates that this rural poverty reduction was mostly due to income growth rather than redistribution.

Suggested Citation

  • Luo, Chuliang & Li, Shi & Sicular, Terry, 2020. "The long-term evolution of national income inequality and rural poverty in China," China Economic Review, Elsevier, vol. 62(C).
    • Handle: RePEc:eee:chieco:v:62:y:2020:i:c:s1043951x20300626
    DOI: 10.1016/j.chieco.2020.101465
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    References listed on IDEAS

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    2. Stark, Oded & Taylor, J Edward & Yitzhaki, Shlomo, 1986. "Remittances and Inequality," Economic Journal, Royal Economic Society, vol. 96(383), pages 722-740, September.
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    More about this item

    Keywords

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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