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Rising Regional Inequality in China:Policy Regimes and Structural Changes

Author

Listed:
  • Chun- Yu Ho

    (Department of Economics, Boston University)

  • Dan Li

    (Department of Economics, Boston University)

Abstract

Regional inequality is severe in China since regional development is uneven due to various initial conditions and government policies. We employ unit root tests allowing for structural breaks to alternative inequality measures from 1952 to 2000. Empirical results indicate that (1) the regional inequality is trend stationary with structural breaks rather than follow a random walk. Thus, ignoring structural changes might induce incorrect inference and misleading policy implications; (2) the break points are associated with episodic events in Chinese economic history such as the Cultural Revolution and market reforms. It implies that the policies had a long-lasting and fundamental effect on the inequality.

Suggested Citation

  • Chun- Yu Ho & Dan Li, 2007. "Rising Regional Inequality in China:Policy Regimes and Structural Changes," Boston University - Department of Economics - Working Papers Series WP2007-013, Boston University - Department of Economics.
    • Handle: RePEc:bos:wpaper:wp2007-013
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    2. Kang Ernest Liu & Hung‐Hao Chang & Wen S. Chern, 2011. "Examining changes in fresh fruit and vegetable consumption over time and across regions in urban China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 3(3), pages 276-296, September.
    3. Herrerias, M.J. & Ordoñez, J., 2012. "New evidence on the role of regional clusters and convergence in China (1952–2008)," China Economic Review, Elsevier, vol. 23(4), pages 1120-1133.
    4. Chun‐Yu Ho & Dan Li, 2010. "Spatial Dependence and Divergence across Chinese Cities," Review of Development Economics, Wiley Blackwell, vol. 14(2), pages 386-403, May.
    5. Bian, Zhicun & Ma, Jun & Ni, Jinlan & Stewart, Shamar, 2020. "Synchronization of regional growth dynamics in China," China Economic Review, Elsevier, vol. 61(C).
    6. Brantly Callaway & Tong Li & Joel Rodrigue & Yuya Sasaki & Yong Tan, 2024. "Regulation, Emissions and Productivity: Evidence from China’s Eleventh Five-Year Plan," Staff Working Papers 24-7, Bank of Canada.
    7. Guangdong Li & Chuanglin Fang, 2014. "Analyzing the multi-mechanism of regional inequality in China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(1), pages 155-182, January.
    8. José Villaverde & Adolfo Maza, 2012. "Chinese per Capita Income Distribution, 1992–2007: A Regional Perspective," Asian Economic Journal, East Asian Economic Association, vol. 26(4), pages 313-331, December.
    9. Emanuele Felice & Iacopo Odoardi & Dario D’Ingiullo, 2023. "The Chinese Inland-Coastal Inequality: The Role of Human Capital and the 2007–2008 Crisis Watershed," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(2), pages 761-788, July.
    10. Guangdong Li & Chuanglin Fang, 2018. "Spatial Econometric Analysis of Urban and County-level Economic Growth Convergence in China," International Regional Science Review, , vol. 41(4), pages 410-447, July.

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    Keywords

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    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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