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Nonagricultural Employment Determinants and Income Inequality Decomposition

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  • Xiaoyun Liu
  • Terry Sicular

Abstract

Nonagricultural income has become an important source of rural household income in China and has brought about wide inequality in rural areas. This paper investigates the determinants of nonagricultural employment and income and how they contribute to income inequality using the China Household Income Project (CHIP) 2002 survey data and a three-step decomposition approach. Our results indicate that educational inequality accounts for 9 percent and 36 percent, respectively, of wage and self-employment income inequality, implying that educational inequality plays a substantial role in nonagricultural income inequality. The results also show that community characteristics explain much inequality in wage and self-employment income, indicating that local development is important in the determination of nonagricultural income inequality.

Suggested Citation

  • Xiaoyun Liu & Terry Sicular, 2009. "Nonagricultural Employment Determinants and Income Inequality Decomposition," Chinese Economy, Taylor & Francis Journals, vol. 42(4), pages 29-43, July.
    • Handle: RePEc:mes:chinec:v:42:y:2009:i:4:p:29-43
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    1. C. Duvivier & S. Li & M.-F. Renard, 2013. "Are workers close to cities paid higher nonagricultural wages in rural China?," Applied Economics, Taylor & Francis Journals, vol. 45(30), pages 4308-4322, October.
    2. Chloé Duvivier Duvivier & Mary-Françoise Renard & Shi Li, 2012. "Are workers close to cities paid higher non-agricultural wages in rural China?," CERDI Working papers halshs-00673698, HAL.
    3. Shi, Xinjie, 2022. "Inequality of opportunity in earnings in rural China," Journal of Asian Economics, Elsevier, vol. 81(C).
    4. Tsun Se Cheong & Yanrui Wu, 2013. "Globalization and Regional Inequality," Economics Discussion / Working Papers 13-10, The University of Western Australia, Department of Economics.
    5. Julie A. Silva, 2013. "Rural Income Inequality in Mozambique: National Dynamics and Local Experiences?," The Review of Regional Studies, Southern Regional Science Association, vol. 43(1), pages 23-50, Summer.
    6. Iris Claus & Les Oxley & Chen Wang & Guanghua Wan & Dan Yang, 2014. "Income Inequality In The People'S Republic Of China: Trends, Determinants, And Proposed Remedies," Journal of Economic Surveys, Wiley Blackwell, vol. 28(4), pages 686-708, September.
    7. Ling Ma & Xiaoyun Liu & Xian Xin, 2013. "Do Poor Rural Households Produce Less Grain than Non-poor Rural Households," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 21(6), pages 22-36, November.

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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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