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Inequality and Internal Migration in China: Evidence from Village Panel Data

Author

Listed:
  • Wei Ha

    (Policy Specialist at the Human Development Report Office, UNDP)

  • Junjian Yi

    (Economics Department of the Chinese University of Hong Kong)

  • Junsen Zhang

    (Economics Department of the Chinese University of Hong Kong)

Abstract

This paper analyzes the impact of rural-to-urban migration on income inequality and gender wage gap in source regions using a newly constructed panel dataset for around 100 villages over a ten-year period from 1997 to 2006 in China. Since income inequality is time-persisting, we use a system GMM framework to control for the lagged income inequality, in which contemporary emigration is also validly instrumented. We found a Kuznets (inverse U-shaped) pattern between migration and income inequality in the sending communities. Specifically, contemporary emigration increases income inequality, while lagged emigration has strong income inequalityreducing effect in the sending villages. A 50-percent increase in the lagged emigration rate translates into one-sixth to one-seventh standard deviation reduction in inequality. These effects are robust to the different specifications and different measures of inequality. More interestingly, the estimated relationship between emigration and the gender wage gap also has an inverse Ushaped pattern. Emigration tends to increase the gender wage gap initially, and then tends to decrease it in the sending villages.

Suggested Citation

  • Wei Ha & Junjian Yi & Junsen Zhang, 2009. "Inequality and Internal Migration in China: Evidence from Village Panel Data," Human Development Research Papers (2009 to present) HDRP-2009-27, Human Development Report Office (HDRO), United Nations Development Programme (UNDP), revised Jul 2009.
    • Handle: RePEc:hdr:papers:hdrp-2009-27
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Thomas Demuynck, 2012. "An (almost) unbiased estimator for the S-Gini index," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(1), pages 109-126, March.
    2. Yuqin Huang, 2012. "From the ‘feminization of agriculture’ to the ‘ageing of farming populations’: Demographic transition and farming in a central Chinese village," Local Economy, London South Bank University, vol. 27(1), pages 19-32, February.
    3. Ranathunga, Seetha P.B., 2011. "Impact of rural to urban labour migration and the remittances on sending household welfare: a Sri Lankan case study," MPRA Paper 35943, University Library of Munich, Germany, revised 14 Dec 2011.
    4. James Alm & Yongzheng Liu, 2014. "China's Tax-for-Fee Reform and Village Inequality," Oxford Development Studies, Taylor & Francis Journals, vol. 42(1), pages 38-64, March.
    5. WANG, Sophie Xuefei & Yu Benjamin, FU, 2019. "Labor mobility barriers and rural-urban migration in transitional China," China Economic Review, Elsevier, vol. 53(C), pages 211-224.
    6. Nancy Chau & Ravi Kanbur & Yu Qin, 2014. "Do public work schemes deter or encourage outmigration? Empirical evidence from China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    7. Hussain, Nor Ermawati & Shaari, Mohd Shahidan & Mohamad Akhir, Noor Haslina & Chau, Diana Nabila Abdullah, 2018. "Macroeconomic Variables and In-Migration in Malaysia’s Developed States," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(1), pages 225-241.
    8. Zhenhai Xiang & Pengfei Ban & Qifeng Yuan, 2020. "Measurement of the Income Difference of Rural Residents in Peri-Urbanized Areas and Its Influencing Factors: Evidence from Nanhai, Foshan, China," Sustainability, MDPI, vol. 12(20), pages 1-21, October.
    9. Wilson, E. J. & Jayanthakumaran, K. & Verma, R., 2012. "Demographics, Labor Mobility, and Productivity," ADBI Working Papers 387, Asian Development Bank Institute.
    10. Nancy Chau & Ravi Kanbur & Yu Qin, 2014. "Do public work schemes deter or encourage outmigration? Empirical evidence from China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.

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    More about this item

    Keywords

    Internal Migration; Inequality; System GMM;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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