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Dynamics of Income Distribution across Chinese Provinces during 1978-98

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  • Hong Li

Abstract

This study attempts to examine the growth pattern of China's economy during 1978-98 from the perspective of income distribution dynamics. Motivated by the model of dynamic distribution, a transition matrix is derived from a panel of ratios of provincial real incomes to national averages across 30 provinces over 1978-98. The transition matrix is used not only to reveal the transitions of provinces between the states of income over time, but also to predict whether there is a tendency across provinces to converge in real income per worker in the long run. This study finds evidence of a slight reduction of income dispersion across Chinese provinces over 1978-98. However, the slight reduction of income dispersion is not strong enough for the provinces to converge to mean income. But there is a strong tendency to converge across provinces within regions and it is evident that, in the eastern region, poor provinces caught up with rich ones over the period under study. The long-run distribution indicates that there will not be a tendency to converge in real GDP per capita across provinces in the long run.

Suggested Citation

  • Hong Li, 2003. "Dynamics of Income Distribution across Chinese Provinces during 1978-98," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 1(2), pages 145-157.
  • Handle: RePEc:taf:jocebs:v:1:y:2003:i:2:p:145-157
    DOI: 10.1080/1476528032000066703C
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    References listed on IDEAS

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    1. Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
    2. Quah, Danny T, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," Economic Journal, Royal Economic Society, vol. 106(437), pages 1045-1055, July.
    3. Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
    4. Li, Hong & Liu, Zinan & Rebelo, Ivonia, 1998. "Testing the Neoclassical Theory of Economic Growth: Evidence from Chinese Provinces," Economic Change and Restructuring, Springer, vol. 31(2-3), pages 117-132.
    5. Jian, Tianlun & Sachs, Jeffrey D. & Warner, Andrew M., 1996. "Trends in regional inequality in China," China Economic Review, Elsevier, vol. 7(1), pages 1-21.
    6. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-867, June.
    7. Quah, Danny, 1997. "Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," CEPR Discussion Papers 1586, C.E.P.R. Discussion Papers.
    8. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
    9. Danny Quah, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEP Discussion Papers dp0280, Centre for Economic Performance, LSE.
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    Cited by:

    1. Bin, Peng, 2015. "Regional Disparity and Dynamic Development of China: a Multidimensional Index," MPRA Paper 61849, University Library of Munich, Germany.
    2. Cheong, Tsun Se & Wu, Yanrui, 2013. "Regional disparity, transitional dynamics and convergence in China," Journal of Asian Economics, Elsevier, vol. 29(C), pages 1-14.
    3. repec:eee:chieco:v:48:y:2018:i:c:p:125-138 is not listed on IDEAS

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    Keywords

    China; Convergence; Dynamics; Income Distribution;

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