Nonfarm activity and rural income inequality : a case study of two provinces in China
Nonfarm activity plays an increasingly important role in rural household income. Based on data from the Living Standards Measurement Study in the provinces of Hebei and Liaoning, the authors study the distribution of nonfarm income in rural China. First, they assume nonfarm income as an exogenous transfer to total income to decompose the Gini index. Second, they assume nonfarm income as a potential substitute for farm income to take household choices into account and simulate household income. The results show that nonfarm activity reduces rural income inequality by raising the income of poor households to a larger extent than that of rich households. Improving rural infrastructure and implementing universal basic education are critical to build up the capacity of households (in particular, poor households) to participate in nonfarm activity. Strengthening the links between farm activity and nonfarm activity is essential to optimize the contribution of nonfarm activity to pro-poor rural economic development.
|Date of creation:||01 Jan 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Shand, R T, 1987. "Income Distribution in a Dynamic Rural Sector: Some Evidence from Malaysia," Economic Development and Cultural Change, University of Chicago Press, vol. 36(1), pages 35-50, October.
- Ravallion, Martin & Chen, Shaohua, 2007.
"China's (uneven) progress against poverty,"
Journal of Development Economics,
Elsevier, vol. 82(1), pages 1-42, January.
- Knight, John & Song, Lina, 1993.
"The Spatial Contribution to Income Inequality in Rural China,"
Cambridge Journal of Economics,
Oxford University Press, vol. 17(2), pages 195-213, June.
- Knight, J. & Song, L., 1990. "The Spatial Contribution To Income Inequality In Rural China," Economics Series Working Papers 99106, University of Oxford, Department of Economics.
- Bhalla, A. S., 1990. "Rural-urban disparities in India and China," World Development, Elsevier, vol. 18(8), pages 1097-1110, August.
- Adams, Richard H, Jr, 1989. "Worker Remittances and Inequality in Rural Egypt," Economic Development and Cultural Change, University of Chicago Press, vol. 38(1), pages 45-71, October.
- Reardon, Thomas & Taylor, J. Edward, 1996. "Agroclimatic shock, income inequality, and poverty: Evidence from Burkina Faso," World Development, Elsevier, vol. 24(5), pages 901-914, May.
- Escobal, Javier, 2001. "The Determinants of Nonfarm Income Diversification in Rural Peru," World Development, Elsevier, vol. 29(3), pages 497-508, March.
- Barrett, C. B. & Reardon, T. & Webb, P., 2001. "Nonfarm income diversification and household livelihood strategies in rural Africa: concepts, dynamics, and policy implications," Food Policy, Elsevier, vol. 26(4), pages 315-331, August.
- Leones, J P & Feldman, S, 1998. "Nonfarm Activity and Rural Household Income: Evidence from Philippine Microdata," Economic Development and Cultural Change, University of Chicago Press, vol. 46(4), pages 789-806, July.
- Ravallion, Martin, 2002.
"Externalities in rural development - evidence for China,"
Policy Research Working Paper Series
2879, The World Bank.
- Ravallion, Martin, 2003. "Externalities in Rural Development: Evidence for China," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Stark, Oded & Taylor, J Edward & Yitzhaki, Shlomo, 1986. "Remittances and Inequality," Economic Journal, Royal Economic Society, vol. 96(383), pages 722-40, September.
- Elbers, Chris & Lanjouw, Peter, 2001. "Intersectoral Transfer, Growth, and Inequality in Rural Ecuador," World Development, Elsevier, vol. 29(3), pages 481-496, March.
- Jean-Pierre Lachaud, 1999.
"Envois de fonds, inégalité et pauvreté au Burkina Faso,"
Revue Tiers Monde,
Programme National Persée, vol. 40(160), pages 793-827.
- Jean-Pierre Lachaud, 1999. "Envoi de fonds, inégalité et pauvreté au Burkina Faso," Documents de travail 40, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
- McMillan, John & Whalley, John & Zhu, Lijing, 1989. "The Impact of China's Economic Reforms on Agricultural Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 781-807, August.
- Lanjouw, Jean O. & Lanjouw, Peter, 2001.
"The rural non-farm sector: issues and evidence from developing countries,"
Agricultural Economics of Agricultural Economists,
International Association of Agricultural Economists, vol. 26(1), October.
- Lanjouw, Jean O. & Lanjouw, Peter, 2001. "The rural non-farm sector: issues and evidence from developing countries," Agricultural Economics, Blackwell, vol. 26(1), pages 1-23, October.
- Pyatt, Graham & Chen, Chau-nan & Fei, John, 1980. "The Distribution of Income by Factor Components," The Quarterly Journal of Economics, MIT Press, vol. 95(3), pages 451-73, November.
- World Bank, 2005. "China : Integration of National Product and Factor Markets, Economic Benefits and Policy Recommendations," World Bank Other Operational Studies 8690, The World Bank.
- Islam, Nurul, 1997. "The nonfarm sector and rural development: review of issues and evidence," 2020 vision discussion papers 22, International Food Policy Research Institute (IFPRI).
- Ravallion, Martin & Shaohua Chen, 1998. "When economic reform is faster than statistical reform - measuring and explaining inequality in rural China," Policy Research Working Paper Series 1902, The World Bank.
- Richard H. Adams, JR., 1993. "Non-farm Income and Inequality in Rural Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 1187-1198.
- Zhu, Ling & Jiang, Zhongyi, 1993. "From Brigade to Village Community: The Land Tenure System and Rural Development in China," Cambridge Journal of Economics, Oxford University Press, vol. 17(4), pages 441-61, December.
- Wagstaff, Adam, 2005. "Decomposing changes in income inequality into vertical and horizontal redistribution and reranking, withapplications to China and Vietnam," Policy Research Working Paper Series 3559, The World Bank.
- Adams, Richard H. Jr. & He, Jane J., 1995. "Sources of income inequality and poverty in rural Pakistan:," Research reports 102, International Food Policy Research Institute (IFPRI).
- 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.
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
Econometric Society, vol. 47(1), pages 153-61, January.
- Lanjouw, Peter, 1999. "Rural Nonagricultural Employment and Poverty in Ecuador," Economic Development and Cultural Change, University of Chicago Press, vol. 48(1), pages 91-122, October.
- Khan, Azizur Rahman & Riskin, Carl, 2001. "Inequality and Poverty in China in the Age of Globalization," OUP Catalogue, Oxford University Press, number 9780195136494, March.
- Chinn, Dennis L, 1979. "Rural Poverty and the Structure of Farm Household Income in Developing Countries: Evidence from Taiwan," Economic Development and Cultural Change, University of Chicago Press, vol. 27(2), pages 283-301, January.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:3811. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.