IDEAS home Printed from https://ideas.repec.org/p/uwo/epuwoc/20086.html
   My bibliography  Save this paper

Non-agricultural Employment Determinants and Income Inequality Decomposition

Author

Listed:

Abstract

Non-agricultural income has become an important source of rural household income and has brought with a wide inequality in rural China. This paper investigates the determinants of non-agricultural employment as well as non-agricultural income and then assesses the contribution of these determinants to income inequality with the Chinese Academy of Social Science 2003 survey data and a three-step decomposition approach. Our results indicate that education inequality accounts for 9% and 36% wage and self-employment income inequality respectively which implies that education inequality plays substantial roles in non-agricultural income inequalities. The community characteristics collectively accounts for 46% and 32% of the wage and self-employment income inequality respectively which in turn suggests that regional development is of great importance in the determination of non-agricultural income inequality.

Suggested Citation

  • Xiaoyun Liu & Terry Sicular, 2008. "Non-agricultural Employment Determinants and Income Inequality Decomposition," University of Western Ontario, Economic Policy Research Institute Working Papers 20086, University of Western Ontario, Economic Policy Research Institute.
    • Handle: RePEc:uwo:epuwoc:20086
    as

    Download full text from publisher

    File URL: https://ir.lib.uwo.ca/cgi/viewcontent.cgi?article=1050&context=economicsepri_wp
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Guanghua Wan & Zhangyue Zhou, 2005. "Income Inequality in Rural China: Regression‐based Decomposition Using Household Data," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 107-120, February.
    2. Du, Yang & Park, Albert & Wang, Sangui, 2005. "Migration and rural poverty in China," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 688-709, December.
    3. Zhang, Linxiu & Rozelle, Scott & Huang, Jikun, 2001. "Off-Farm Jobs and On-Farm Work in Periods of Boom and Bust in Rural China," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 505-526, September.
    4. Gustafsson,Björn A. & Shi,Li & Sicular,Terry (ed.), 2008. "Inequality and Public Policy in China," Cambridge Books, Cambridge University Press, number 9780521870450.
    5. Guanghua Wan, 2002. "Regression-based Inequality Decomposition: Pitfalls and a Solution Procedure," WIDER Working Paper Series DP2002-101, World Institute for Development Economic Research (UNU-WIDER).
    6. Jonathan Morduch & Terry Sicular, 2002. "Rethinking Inequality Decomposition, With Evidence from Rural China," Economic Journal, Royal Economic Society, vol. 112(476), pages 93-106, January.
    7. meng, xin & wu, harry, 1994. "Household Income Determination and Regional Income Differential in Rural China," MPRA Paper 1345, University Library of Munich, Germany.
    8. de Brauw, Alan & Huang, Jikun & Rozelle, Scott & Zhang, Linxiu & Zhang, Yigang, 2002. "The Evolution of China's Rural Labor Markets During the Reforms," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 329-353, June.
    9. Benjamin, Dwayne & Brandt, Loren & Giles, John, 2005. "The Evolution of Income Inequality in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 53(4), pages 769-824, July.
    10. Kai-yuen, Tsui, 1998. "Trends and Inequalities of Rural Welfare in China: Evidence from Rural Households in Guangdong and Sichuan," Journal of Comparative Economics, Elsevier, vol. 26(4), pages 783-804, December.
    11. Wan, Guanghua, 2004. "Accounting for income inequality in rural China: a regression-based approach," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 348-363, June.
    12. Patrick Puhani, 2000. "The Heckman Correction for Sample Selection and Its Critique," Journal of Economic Surveys, Wiley Blackwell, vol. 14(1), pages 53-68, February.
    13. Christofides, Louis N. & Pashardes, Panos, 2002. "Self/paid-employment, public/private sector selection, and wage differentials," Labour Economics, Elsevier, vol. 9(6), pages 737-762, December.
    14. Adams, Richard H., 2001. "Nonfarm income, inequality, and poverty in rural Egypt and Jordan," Policy Research Working Paper Series 2572, The World Bank.
    15. John Knight & Lina Song, 2003. "Chinese Peasant Choices: Migration, Rural Industry or Farming," Oxford Development Studies, Taylor & Francis Journals, vol. 31(2), pages 123-148.
    16. Fields, Gary S & Yoo, Gyeongjoon, 2000. "Falling Labor Income Inequality in Korea's Economic Growth: Patterns and Underlying Causes," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(2), pages 139-159, June.
    17. Gary S. Fields & Gyeongjoon Yoo, 2000. "Falling Labor Income Inequality In Korea'S Economic Growth: Patterns And Underlying Causes," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(2), pages 139-159, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chloé Duvivier Duvivier & Mary-Françoise Renard & Shi Li, 2012. "Are workers close to cities paid higher non-agricultural wages in rural China?," CERDI Working papers halshs-00673698, HAL.
    2. Shi, Xinjie, 2022. "Inequality of opportunity in earnings in rural China," Journal of Asian Economics, Elsevier, vol. 81(C).
    3. C. Duvivier & S. Li & M.-F. Renard, 2013. "Are workers close to cities paid higher nonagricultural wages in rural China?," Applied Economics, Taylor & Francis Journals, vol. 45(30), pages 4308-4322, October.
    4. Ling Ma & Xiaoyun Liu & Xian Xin, 2013. "Do Poor Rural Households Produce Less Grain than Non-poor Rural Households," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 21(6), pages 22-36, November.
    5. Tsun Se Cheong & Yanrui Wu, 2013. "Globalization and Regional Inequality," Economics Discussion / Working Papers 13-10, The University of Western Australia, Department of Economics.
    6. Julie A. Silva, 2013. "Rural Income Inequality in Mozambique: National Dynamics and Local Experiences?," The Review of Regional Studies, Southern Regional Science Association, vol. 43(1), pages 23-50, Summer.
    7. Iris Claus & Les Oxley & Chen Wang & Guanghua Wan & Dan Yang, 2014. "Income Inequality In The People'S Republic Of China: Trends, Determinants, And Proposed Remedies," Journal of Economic Surveys, Wiley Blackwell, vol. 28(4), pages 686-708, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. XING, Li & FAN, Shenggen & LUO, Xiaopeng & ZHang, Xiaobo, 2009. "Community poverty and inequality in western China: A tale of three villages in Guizhou Province," China Economic Review, Elsevier, vol. 20(2), pages 338-349, June.
    2. Ming Lu & Jianzhi Zhao, 2009. "The Contribution of Social Networks to Income Inequality in Rural China: A Regression-Based Decomposition and Cross-Regional Comparison," Global COE Hi-Stat Discussion Paper Series gd08-019, Institute of Economic Research, Hitotsubashi University.
    3. Hoang Van Long, 2013. "Unequal Regional Development in Rural Vietnam: Sources of Spatial Disparities and Policy Considerations," Journal of Economics and Behavioral Studies, AMH International, vol. 5(6), pages 325-335.
    4. Zhao, Ge & Zhou, P. & Wen, Wen, 2022. "What cause regional inequality of technology innovation in renewable energy? Evidence from China," Applied Energy, Elsevier, vol. 310(C).
    5. Zhong, Hai, 2011. "The impact of population aging on income inequality in developing countries: Evidence from rural China," China Economic Review, Elsevier, vol. 22(1), pages 98-107, March.
    6. Sebastian Leitner, 2015. "Drivers of wealth inequality in euro area countries," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 137, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    7. Ferreira Lima, Luis Cristovao, 2013. "A Persistente Desigualdade nas Grandes Cidades Brasileiras: o Caso de Brasília [The Persistent Inequality in the Great Brazilian Cities: The case of Brasília]," MPRA Paper 50936, University Library of Munich, Germany.
    8. Sabyasachi Tripathi, 2017. "Source of Inequality in Consumption Expenditure in India: A Regression Based Inequality Decomposition Analysis," Journal of Income Distribution, Ad libros publications inc., vol. 25(1), pages 1-34, March.
    9. Xu, Xinkuo & Han, Liyan & Lv, Xiaofeng, 2016. "Household carbon inequality in urban China, its sources and determinants," Ecological Economics, Elsevier, vol. 128(C), pages 77-86.
    10. Ferreira Lima, Luis Cristovao, 2013. "The Persistent Inequality in the Great Brazilian Cities: The Case of Brasília," MPRA Paper 50938, University Library of Munich, Germany.
    11. Chi, Wei, 2012. "Capital income and income inequality: Evidence from urban China," Journal of Comparative Economics, Elsevier, vol. 40(2), pages 228-239.
    12. Omoniyi B Alimi & David C Maré & Jacques Poot, 2020. "The effects of immigration and skills on urban income inequality in New Zealand: two decomposition approaches," RF Berlin - CReAM Discussion Paper Series 2023, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    13. Glauben, Thomas & Herzfeld, Thomas & Rozelle, Scott & Wang, Xiaobing, 2012. "Persistent Poverty in Rural China: Where, Why, and How to Escape?," World Development, Elsevier, vol. 40(4), pages 784-795.
    14. 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.
    15. Feng Dong & Bolin Yu & Jixiong Zhang, 2018. "What Contributes to Regional Disparities of Energy Consumption in China? Evidence from Quantile Regression-Shapley Decomposition Approach," Sustainability, MDPI, vol. 10(6), pages 1-26, May.
    16. Chi, Wei & Li, Bo & Yu, Qiumei, 2011. "Decomposition of the increase in earnings inequality in urban China: A distributional approach," China Economic Review, Elsevier, vol. 22(3), pages 299-312, September.
    17. Boniface Ngah Epo & Francis Menjo Baye & Nadine Teme Angele Manga, 2011. "Spatial and Inter-temporal Sources of Poverty, Inequality and Gender Disparities in Cameroon: a Regression-Based Decomposition Analysis," Working Papers PMMA 2011-15, PEP-PMMA.
    18. Guanghua Wan & Zhangyue Zhou, 2005. "Income Inequality in Rural China: Regression‐based Decomposition Using Household Data," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 107-120, February.
    19. Guanghua Wan & Ming Lu & Zhao Chen, 2007. "Globalization And Regional Income Inequality: Empirical Evidence From Within China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(1), pages 35-59, March.
    20. Alimi, Omoniyi & Maré, David C. & Poot, Jacques, 2018. "International Migration and the Distribution of Income in New Zealand Metropolitan and Non-Metropolitan Areas," IZA Discussion Papers 11959, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    non-agricultural income; employment; inequality;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:uwo:epuwoc:20086. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://economics.uwo.ca/research/research_papers/epri_workingpapers.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.