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The Unequal Effect of the COVID-19 Pandemic on the Labour Market and Income Inequality in China: A Multisectoral CGE Model Analysis Coupled with a Micro-Simulation Approach

Author

Listed:
  • Qi Zhang

    (School of Economics and Resource Management, Beijing Normal University, Beijing 100875, China
    China Institute for Poverty Reduction, Beijing Normal University, Beijing 100875, China
    China Rural Revitalization and Development Research Center, Beijing Normal University, Zhuhai 519087, China)

  • Xinxin Zhang

    (School of Economics and Resource Management, Beijing Normal University, Beijing 100875, China
    China Institute for Poverty Reduction, Beijing Normal University, Beijing 100875, China
    China Rural Revitalization and Development Research Center, Beijing Normal University, Zhuhai 519087, China)

  • Qi Cui

    (School of Economics and Resource Management, Beijing Normal University, Beijing 100875, China
    Beijing Key Lab of Study on Sci-Tech Strategy for Urban Green Development, Beijing Normal University, Beijing 100875, China)

  • Weining Cao

    (School of Economics and Resource Management, Beijing Normal University, Beijing 100875, China
    China Institute for Poverty Reduction, Beijing Normal University, Beijing 100875, China
    China Rural Revitalization and Development Research Center, Beijing Normal University, Zhuhai 519087, China)

  • Ling He

    (School of Economics and Resource Management, Beijing Normal University, Beijing 100875, China
    Beijing Key Lab of Study on Sci-Tech Strategy for Urban Green Development, Beijing Normal University, Beijing 100875, China)

  • Yexin Zhou

    (School of Economics and Resource Management, Beijing Normal University, Beijing 100875, China
    Center for Innovation and Development Studies, Beijing Normal University, Zhuhai 519087, China)

  • Xiaofan Li

    (School of Economics and Resource Management, Beijing Normal University, Beijing 100875, China
    Beijing Key Lab of Study on Sci-Tech Strategy for Urban Green Development, Beijing Normal University, Beijing 100875, China)

  • Yunpeng Fan

    (Institute of Finance & Banking, Chinese Academy of Social Sciences, Beijing 100710, China)

Abstract

The COVID-19 pandemic had an unequal impact on the employment and earnings of different labourers, consequently affecting households’ per capita income and income inequality. Combining a multisector computable general equilibrium model of China with a micro-simulation approach, this study aims to analyse the unequal effect of the COVID-19 pandemic on China’s labour market and income inequality. The results confirm the unequal impact of the pandemic on the employment and earnings of different labourer types. Labourers who are female, live in urban areas, and have relatively low education levels would suffer greater losses in employment and earnings. The pandemic would reduce household per capita income by 8.75% for rural residents and 6.13% for urban residents. While the pandemic would have a larger negative impact on the employment and earnings of urban labourers, it would have a greater negative impact on the household per capita income of rural residents. Moreover, the per capita income of low-income households is more vulnerable to the pandemic, and the number of residents living below the poverty line would increase significantly. Thus, the pandemic would aggravate income inequality in China and threaten the livelihoods of poor families. This study could inform researchers exploring the distributional effect of the COVID-19 pandemic in developing countries.

Suggested Citation

  • Qi Zhang & Xinxin Zhang & Qi Cui & Weining Cao & Ling He & Yexin Zhou & Xiaofan Li & Yunpeng Fan, 2022. "The Unequal Effect of the COVID-19 Pandemic on the Labour Market and Income Inequality in China: A Multisectoral CGE Model Analysis Coupled with a Micro-Simulation Approach," IJERPH, MDPI, vol. 19(3), pages 1-21, January.
  • Handle: RePEc:gam:jijerp:v:19:y:2022:i:3:p:1320-:d:732974
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