IDEAS home Printed from https://ideas.repec.org/p/gta/workpp/1323.html
   My bibliography  Save this paper

Labor Market Distortions, Rural-Urban Inequality and the Opening of China’s Economy

Author

Listed:
  • Zhai, Fan
  • Hertel, Thomas
  • Wang, Zhi

Abstract

This paper evaluates the impact of some key labor market reforms on rural-urban inequality and income distribution, using a household-disaggregated, recursive dynamic computable general equilibrium (CGE) model of China. We also explore how these factor market reforms interact with product market reforms currently underway as part of China’s WTO accession process. The simulation results show that the reforms in rural land rental market and Hukou system, as well as increasing off-farm labor mobility would reduce the urban-rural income ratio dramatically. Furthermore, the combination of WTO accession and factor market reforms improves both efficiency and equality significantly.

Suggested Citation

  • Zhai, Fan & Hertel, Thomas & Wang, Zhi, 2003. "Labor Market Distortions, Rural-Urban Inequality and the Opening of China’s Economy," GTAP Working Papers 1323, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  • Handle: RePEc:gta:workpp:1323
    Note: GTAP Working Paper No. 27
    as

    Download full text from publisher

    File URL: https://www.gtap.agecon.purdue.edu/resources/res_display.asp?RecordID=1323
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. John Whalley & Shunming Zhang, 2004. "Inequality Change in China and (Hukou) Labour Mobility Restrictions," NBER Working Papers 10683, National Bureau of Economic Research, Inc.
    2. William L. Parish & Xiaoye Zhe & Fang Li, "undated". "Nonfarm Work and Marketization of the Chinese Countryside," University of Chicago - Population Research Center 95-6, Chicago - Population Research Center.
    3. Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years of Regional Inequality in China: A Journey through Revolution, Reform and Openness," CEPR Discussion Papers 2887, C.E.P.R. Discussion Papers.
    4. Anderson, Kym & Huang, Jikun & Ianchovichina, Elena, 2004. "Will China's WTO accession worsen farm household incomes?," China Economic Review, Elsevier, vol. 15(4), pages 443-456.
    5. Fan Zhai & Zhi Wang, 2002. "WTO Accession, Rural Labour Migration and Urban Unemployment in China," Urban Studies, Urban Studies Journal Limited, vol. 39(12), pages 2199-2217, November.
    6. Zhao, Yaohui, 1999. "Labor Migration and Earnings Differences: The Case of Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 47(4), pages 767-782, July.
    7. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550.
    8. Shaohua Chen & Martin Ravallion, 2004. "Welfare Impacts of China's Accession to the World Trade Organization," World Bank Economic Review, World Bank Group, vol. 18(1), pages 29-57.
    9. Li Shantong & Zhai Fan, 2002. "China's WTO Accession and Implications for its Regional Economies," Economie Internationale, CEPII research center, issue 92, pages 67-102.
    10. Elena Ianchovichina & Will Martin, 2004. "Impacts of China's Accession to the World Trade Organization," World Bank Economic Review, World Bank Group, vol. 18(1), pages 3-27.
    11. Tao Yang, Dennis, 1997. "China's land arrangements and rural labor mobility," China Economic Review, Elsevier, vol. 8(2), pages 101-115.
    12. Yaohui Zhao, 1999. "Leaving the Countryside: Rural-to-Urban Migration Decisions in China," American Economic Review, American Economic Association, vol. 89(2), pages 281-286, May.
    13. Wang, Zhi & Zhai, Fan, 1998. "Tariff Reduction, Tax Replacement, and Implications for Income Distribution in China," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 358-387, June.
    14. Wang, Xiaolu & Kalirajan, K. P., 2002. "On explaining China's rural sectors' productivity growth," Economic Modelling, Elsevier, vol. 19(2), pages 261-275, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gta:workpp:1323. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jeremy Douglas). General contact details of provider: http://edirc.repec.org/data/gtpurus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.