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Household Income Dynamics in Rural China

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  • Jyotsna Jalan
  • Martin Ravallion

Abstract

It is well known in theory that certain forms of non-linear dynamics in household incomes can yield poverty traps and distribution-dependent growth. The potential implications for policy are dramatic: effective social protection from transient poverty will be an investment with lasting benefits, and pro-poor redistribution will promote aggregate economic growth. We test for non-linearity in the dynamics of household expenditures and incomes using panel data for rural south-west China. While we find evidence of non-linearity, there is no sign of a dynamic poverty trap.

Suggested Citation

  • Jyotsna Jalan & Martin Ravallion, 2002. "Household Income Dynamics in Rural China," WIDER Working Paper Series DP2002-10, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:dp2002-10
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