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Household Income Dynamics in Rural China

  • Li, Luping
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    This paper examines changes in agriculture and livelihood system in four Chinese villages, on the basis of two waves village-wide household surveys conducted over a decade interval. To identify the factors that are important in accounting for variation in household income change, an income dynamic model is estimated. It is found that education is a main factor affecting household income growth. Increase in schooling years of earners will make the household a larger increase in per capita income. Moreover, industrialization has created more non-agricultural jobs for rural households, while urbanization promoted development of service sector that absorbs a number of rural labors. The results of income dynamic model analysis shows that the initial poor farm gained the most in terms of increase in per capita income over the past a decade. Industrialization and urbanization may provide rural poor more opportunities for their increases in per capita income and help them escaping poverty.

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    Paper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 51561.

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    Date of creation: 2009
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    Handle: RePEc:ags:iaae09:51561
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    1. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-64, July.
    2. Sen, Binayak, 2003. "Drivers of Escape and Descent: Changing Household Fortunes in Rural Bangladesh," World Development, Elsevier, vol. 31(3), pages 513-534, March.
    3. Frank Ellis, 2000. "The Determinants of Rural Livelihood Diversification in Developing Countries," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 289-302.
    4. Fei, John C H & Rainis, Gustav & Kuo, Shirley W Y, 1978. "Growth and the Family Distribution of Income by Factor Components," The Quarterly Journal of Economics, MIT Press, vol. 92(1), pages 17-53, February.
    5. Shorrocks, Anthony F, 1983. "The Impact of Income Components on the Distribution of Family Incomes," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 311-26, May.
    6. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
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