Rural stratification,rural to urban migration,and urban inequality: Evidence from Iran

Recent findings on India have pointed to the importance of the rural caste structure to rural-urban migration and the creation of (partially) segmented urban labor markets. By considering cross-sectional evidence from Iran and by viewing differential access to land, instead of castes, as the determinant of the migrants' background, the implication of this view for the impact of migration on urban inequality is examined. It is found that where migrants are from a landless group urban inequality increases and where they are from a landed group it declines, ceteris paribus. Urban inequality is measured by the construction of an urban housing shares index from the census data.     

The dynamic effect of rural-to-urban migration on inequality in source villages: System GMM estimates from rural China

Using a newly constructed panel dataset that covers the 14-year period from 1997 to 2011 for more than 100 villages in China, this study analyzes the dynamic effect of rural-to-urban migration on inequality in source villages. Given that income inequality is time persisting, we use a system GMM framework. We found that the dynamic relationship between migration and income inequality is inversely U-shaped. Specifically, contemporary migration increases income inequality, whereas lagged migration has a strong income inequality-reducing effect on the sending villages. A 50 percent increase in the lagged migration rate translates into a one-ninth to one-tenth standard deviation reduction in income inequality.     

Expenditure Inequality in Indonesia, 2008–2010: A Spatial Decomposition Analysis and the Role of Education

Based on the 2008–2010 Susenas panel data, this study examines expenditure inequality from spatial perspectives in Indonesia, using three decomposition methods: (i) a conventional Theil index decomposition; (ii) an alternative Theil index decomposition proposed by Elbers et al. (2008); and (iii) the Blinder?Oaxaca decomposition. Our results show that overall inequality in per capita expenditure increases between 2008 and 2010, which coincides with a rising trend in the official Gini coefficient. The contribution of inequality within urban and rural areas to total inequality is larger than that of inequality between urban and rural areas. Looking within urban and rural areas, urban inequality is significantly higher than rural inequality. Java‐Bali in particular records very high urban inequality. Overall, urban inequality increases, urban–rural inequality remains stable, rural inequality decreases, and inequality at the national level increases. Although urban–rural inequality has a relatively low share in overall inequality, the share is not small enough to ignore its impact. Furthermore, when using the alternative decomposition method, the contribution of urban–rural inequality increases substantially. The present study also found that educational differences appear to have played an important role in expenditure inequality within urban areas and between urban and rural areas.     

Inequality of opportunity in earnings in rural China

This paper explores the role of ‘inequality of opportunity’ in individual earnings in rural China, which is attributed to ‘circumstantial’ factors over which individuals have no control, including family background, gender, ethnic minority status and region of birth. These circumstances are contrasted with ‘efforts’ or choices that individuals make, which also impact on their individual earnings. Utilising the China Labour-force Dynamics Survey (CLDS) 2014, I measure the share of inequality of opportunity in the overall inequality of individual annual earnings for the entire sample and for each of four ten-year birth cohorts in rural China. The empirical results revealed that the share of inequality of opportunity in individual earnings for the full sample is 20.4% of the GE(0) coefficient. The adoption of machine learning methods provides a wide range of estimates between 16.4% (regression tress) and 25.4% (forests). Across all birth cohorts, gender is consistently the largest single contributor to inequality of opportunity, while family background is relatively more important for younger cohorts. A closer investigation indicates that those who find themselves in the worst circumstances are likely to exert lower level of effort, not because they don’t want to try harder, but because their circumstances prevent them from doing so.     

Guaranteeing employment to the rural poor: Social functions and class interests in the employment guarantee scheme in Western India

Numerous observers rightly term the landless rural population the ‘most intractable development problem’ in poor societies. Given the extraordinary political and administrative obstacles to redistrubution of rural assets in India (the widely-recognized failture land reforms), attention and finances have recently been focused on public rural employment programmes to alleviate rural distribution. Within India, the State of Maharashtra, with a size and population of a large European nation, has instituted a striking departure from traditional rural works programmes: a guarantee of employment to rural adults on demand. The Employment Guarantee Scheme in one state has since become a significant policy model, and the experience in that state provides something like a laboratory for its analysis. Based on analysis of previous studies and original field work in rural Maharashtra, the article argues that the scheme is something of a rare bird: a programme which seems to be in the objective and subjective interests of the rural poor, as well as consistent with the interests of the rural landed elite, despite their early political objections. The fiscal structure of the scheme is a direct contradiction of Lipton's (1977) model of ‘urban bias’ in Third World development strategies; the Employment Guarantee Scheme is rather more a manifestation of ‘kulak power’. Though promulgated as an alternative to policies entailing redistribution of rural assets, and clearly superior to doing nothing about rural distribution, the scheme is inferior to genuine redistribution in terms of altering the rural political economy. The functions, if not the motivations, of the scheme are profoundly conservative in a structural sense, politically and economically; the philosophical underpinnings, and perhaps, potentially, the consequences for mobilization of the rural poor, are quite the opposite.     

Effects of school closure on household labor supply: Evidence from rural China

This paper studies the effects of school closure on household labor supply exploiting China's large-scale rural primary school closing during the early 2000s. Using CHNS 1991–2011 and CHIP 2007–2008 datasets and a difference-in-differences approach, we find that school closure significantly increases the total annual income of mothers of primary school-aged children, which comes virtually entirely from increases in wage income, due to more participation, more working hours, and higher wage rates. This significant positive effect can plausibly be attributed to their migration responses: mothers engage in temporary rural-urban migration to care for children following school closure. We find no effects on fathers' income and migration behavior. Our study provides the first causal estimation of the impacts of school closure on household labor supply and sheds light on the migration decision-making of rural females.     

农村劳动力迁移为什么没有缩小城乡收入差距——以广东为例

广东经济发展过程中出现农村劳动力迁移量和城乡收入差距同时扩大的现象,本文从农村迁移劳动力在城市劳动力市场上的就业分布和农村劳动力迁移对城乡人力资本差距的影响两方面对此与传统经济学理论相悖的现象进行了分析.本文认为农村劳动力迁移没有缩小城乡收入差距一方面因为农村劳动力在城市劳动力市场受到歧视,一般在城市次要劳动力市场就业;另一方面因为农村劳动力迁移扩大了城乡人力资本差距,从而扩大了城乡收入差距.     

The impact of Chinese government promoted homestead transfer on labor migration and household's well-being: A study in three rural areas

The rural homestead transfers (RHT) promoted by the Chinese government in the recent years have resulted in major economic and landscape changes in the countryside and profound impacts on the households’ well-beings. Our paper aims to explain the complex relation between RHT, labor migration and households’ well-beings, based on a survey about three pilot rural areas (Changyuan, Yiwu and Wujin, in the Henan, Zhejiang and Jiangsu Provinces). The results found that the transfer has directly influenced the farmers’ income status, and indirectly through labors’ migration. RHT had a positive impact on their residential environment, and poorly improved their social security. It has improved the living standard of the households, positively influenced the farmers’ psychological state, and had very limited influence on their political participation and freedom.     

山地丘陵区农户迁居模式研究——以巩义市为例

居住条件是反映居民基本生存状态的重要指标之一。文章通过对巩义市三个类型村庄210份农户调研数据的分析,试图找出山地丘陵区农户迁居的影响因素和迁居模式。建议农村居民点建设应从农村实际情况出发,合理保留农村景观。     

The urbanization-household gender inequality nexus: Evidence from time allocation in China

Urbanization and accompanying socio-economic change, alter intra-household behaviours including paid and unpaid work patterns. China's rapid urbanization raises important questions about the changing nature of gender asymmetries in the household division of labour. Using 24-hour time module data from the China Family Panel Studies, we investigate time allocation of females and males in matched-couples in urban, rural-urban migrant, and rural households. Our model explicitly incorporates the impact of care of young children on time-use. Distinguishing between care and other housework, overall, we find while traditional gendered time-use patterns persist among rural households, urbanization and migration reduces gender differentials in unpaid work. Both urban and migrant fathers engage in more care work than their rural counterparts. We shed new light on the configurations of paid and unpaid work, leisure and self-care; women's burden of a ‘second shift’ of unpaid work; the role of education and income in eroding gender norms; and the impact of grandparents on time-use.     

Expropriation with hukou change and labour market outcomes in China

We study the labour market outcomes of Chinese household members changing their registration status (hukou) from rural to urban as a result of land expropriation using panel data from the 2008–2010 Rural Urban Migration in China (RUMiC). While it is largely unclear the extent to which expropriation can be viewed as an event exogenous to individual and household choices, we deal with the potential selection bias of being expropriated by using the methodology proposed by Oster (2019). Gaining an urban hukou is found to improve the labour market outcomes of expropriated household heads and spouses relative to comparable rural stayers and rural-urban migrants. In particular, hukou-changers gain better access to permanent jobs in the public sector through formal search channels. We also find that expropriated parents invest substantially more in children's human capital as compared to rural parents, suggesting that leveling the hukou status among children can contribute to reducing intergenerational inequality.     

Liberalizing rural-to-urban construction land transfers in China: Distribution effects

China's land market is characterized by a dual urban-rural system, with the government in control of rural-urban land transfers. In recent years, different types of pilot projects have been implemented to experiment with liberalizing markets for rural-urban construction land transfers. The objective of this study is to gain insights into the distributional effects of three different types of land liberalization rules by making a comparative analysis of three pilot projects carried out under each of these liberalization rules. We find that transfers facing more liberalized rules result in higher shares of land revenue flowing to the rural sector and thereby reduce the ruralurban income gap. But direct transfers between rural and urban land users also contribute to growing income inequality within the rural sector, as households living in urban fringes benefit relatively more from such transfers. A tradable quota system can reduce the impact of location on the price of land, and thereby contribute to a more equal distribution of the revenues of rural-urban land transfers within the rural sector.     

Income inequality and subjective wellbeing: Panel data evidence from China

Using four waves of longitudinal data from the China Family Panel Studies (CFPS), we examine the effects of income inequality on subjective wellbeing (SWB). We take a dual approach in measuring income inequality, and thus, we examine the effects of inequality using province-level Gini coefficient as well as between-group inequality or identity-related inequality defined as the income gap between migrants without urban household registration identity (hukou) and urban residents. We find negative effects of both province-level income inequality and between-group income inequality on SWB, measured by life satisfaction. Our results also show that the effects of income inequality on SWB is stronger for rural hukou residents compared to urban hukou residents. These findings are robust to alternative ways of measuring SWB and income inequality. In addition, we find evidence suggesting that neighbourhood trust is an important channel through which income inequality operates to reduce SWB. We suggest policies that promote trust in communities with high inequality with a view of addressing the negative effects of inequality on SWB.     

A Tale of Two Armies: Comparative Growth in the Mirror of the First World War

Soldiers born during the late nineteenth century were taller in Australia than in Canada. A widening of the gap for those born in the 1890s supports the more optimistic interpretation of Australia's 1890s depression and is consistent with the ‘hazardous growth’ hypothesis of an inverse relationship between economic change and public health. The rural–urban stature gradient was steeper in Australia although Canada had greater stature inequality in all other dimensions. Native-born soldiers were taller than the British-born in both countries. We see no evidence of selective migration effects that would imply feedback from stature to growth.     

The long-term evolution of national income inequality and rural poverty in China

Using the five waves of the China Household Income Project surveys conducted during 1988–2013, we investigate long-term changes in national income inequality and rural poverty in China. National income inequality rose markedly to 2007 and thereafter fell slightly. Income growth was widely shared, but inequality increased because the high-income percentiles had faster income growth than lower percentiles and because the gap between urban and rural household incomes widened. The fall in income inequality after 2007 reflects faster income growth among low-income percentiles and the impacts of newly introduced redistributive policies. The paper also finds a considerable, ongoing poverty reduction in rural China. A poverty decomposition analysis indicates that this rural poverty reduction was mostly due to income growth rather than redistribution.     

中印城乡不平等比较:经济学分析视角

从总体上看,目前中印两国农村内部不平等程度基本上差不多,但是两国收入分配不平等的历史变化和趋势不一样;中国城乡之间无论是收入差距,还是消费差距所反映的不平等程度都明显高于印度的不平等;中国是农村不平等大于城市不平等程度,而印度则是城市不平等大于农村不平等。导致这些结构性差异的原因主要是:印度的经济增长包括技术变化、对外开放、人力资本等因素对于城乡内部以及城乡之间、地区之间等收入不平等变化产生的影响和作用更大;而中国经济增长和对外开放等因素虽然对于收入不平等也有一定影响,但是政府的政策导向和理念(先富后富政策理念与城市和沿海偏向政策)则对于城乡内部以及同一地区内城乡之间的不平等的影响更大一些。     

People＇s Mobility and Guanxi Networks： A Case Study

The increase in the movement of people from rural to urban areas since the mid-1980s represents the largest labor migration ever experienced in China. Because migration is a process of selection, it is imperative that the major dynamics determining the selection are studied. What are the critical characteristics of migrants that help them to realize their mobility from rural areas to urban areas？ While educational attainment, gender, age, marital status and personal skills are important variables in the selection process, the present paper examines how social networks （guanxi connections） play a significant role in the process of migration selection in China. A case study from one of the northern villages in rural China is used to explore how social networks have shaped and given meaning to migration. The present paper elaborates on how people＇s social mobility has coincided with and been reinforced by people＇s physical mobility.     

Hukou system reforms and skilled-unskilled wage inequality in China

In China, rural migrant workers usually cannot get fair treatment due to the hukou system. This paper investigates how hukou system reforms affect the skilled-unskilled wage inequality through the general equilibrium approach. In the basic model, we find that an increase in the strength of hukou system reforms will narrow down the wage inequality if the urban skilled sector is more capital intensive than the urban unskilled sector. In addition, we separately extend the basic model by introducing the endogenous minimum wage and an informal sector, and find that in these two extended cases the main results of the basic model will conditionally or unconditionally hold. When we consider some empirical evidences in China, our models predict that an increase in the strength of hukou system reforms will reduce the wage inequality.     

The trend of the Gini coefficient of China (1978–2010)

ABSTRACT

This study proposes a new approach to analyse the effects of an overlap term on the calculation of the overall Gini coefficient and estimates China’s Gini ratios since the adoption of the economic reform and open-door policies. A decomposition of the Chinese Gini coefficient for 1978–2010 reveals that the key factor contributing to income inequalities is the income disparity between rural and urban inhabitants. We further investigate the features of this income inequality between rural and urban areas and employ statistical approaches to evaluate the effects of urbanisation and rural-to-urban average income on nationwide income inequality. The results show that accelerating the pace of urbanisation is mainly responsible for decreasing China’s income disparity. Drawing on these results, we conclude with suggestions for related policies.     

Introduction to income inequalities and redistribution in china

This special section presents the main findings about long-run trends in inequality in China and its driving factors as they emerge from a country case study carried out under a UNU-WIDER supported project.¹ Special focus in the umbrella project were on three issues: (i) the role of earnings inequality and its determinants; (ii) the role of top incomes when administrative records or other sources can be combined with household surveys; and (iii) the redistributive impact of public policies. Main findings of the project including those for China results were presented in a special panel during the UNU-WIDER Think Development – Think WIDER development conference held in Helsinki in September 2018.²

1. Motivation

Inequality has once again emerged as a major issue in economic development across the developed and developing world, and addressing this challenge is key in the UN Sustainable Development Agenda. The UNU-WIDER conference on Mapping the Future of Development Economics held in Helsinki in September 2016³ led to the formulation of a project to study inequality in five major developing countries accounting for more than 40 per cent of the world’s population. UNU-WIDER implemented these studies under its Inequality in the Giants project,⁴ designed as part of a broader international effort to shed light on a set of new questions on between-country and within-country inequalities, by generating integrated datasets and applying a consistent methodology to investigate the determinants of inequality dynamics in some of the world’s largest economies. China was included among the five case countries, and the effort included both a series of papers on China, produced under the coordination of Professor Shi Li and various workshops and meetings. Coming to grips with inequality in China is an obvious priority for anyone interested in trends in global inequality; and the present special section contains five key papers produced in the context of the UNU-WIDER project and subsequently accepted for publication by the China Economic Review.

2. Content of the special section

The five papers on inequality in China presented in this special section cover different topics and jointly illustrate a key set of important themes in the recent evolution of China’s income distribution.The opening study by Luo, Li, and Sicular (LLS) provides an overview and analysis of the long-term evolution of inequality in China, while the next three papers — on urban wage inequality, public transfers, and top incomes — each illustrates and delves more deeply into important aspects of the broader trends in inequality.What are the main findings of these papers? The core finding is that inequality in China rose markedly from the 1980s through the early 2000s; only since 2008 has the upward trend stopped or reversed. LLS report and examine the underpinnings of this core finding, using the five waves of the China Household Income Project surveys conducted during 1988-2013. This paper also finds a considerable, ongoing reduction in rural poverty, and a poverty decomposition analysis indicates that this poverty reduction was mostly due to income growth rather than redistribution in rural areas.The second paper by Gustafsson and Wan (GW) is on urban wage inequality from 1988 to 2013 and it sheds further light on the changes in the distribution of wage earnings. The authors highlight that average wages have grown rapidly and that wage inequality increased until 2007. Moreover, age has become weaker and education stronger related with wage. Importantly, the gender wage gap once small widened rapidly between 1995 and 2007, and workers in foreign owned firm and the state sector enjoy a wage premium.While wages are the most important component of income, it is only part of the inequality story. One important additional question is the role of government taxes and transfers. Since the early 2000s, China has embarked on a major effort to put in place a universal social safety net. The study by Cai and Yue (CY), which is the third paper, assess the consequences of these efforts. Their key conclusions include that the same public policy may produce different redistributive implications. Moreover, if the government keeps increasing the social security transfer scale without changing its distribution, then inequality will increase in China. In addition, formal-sector pension takes up the biggest share and is the most un-equalizing sub-item of all social security transfers; and related to the first paper in the special section they argue that the government should spend more on Dibao and rural residents pension to reduce inequality.Arguably, income inequality measured using household survey data understates actual inequality because surveys have difficulty in capturing top incomes. In the Chinese case, concerns about such bias have increased in the past ten years due to the expansion of private wealth and growing numbers of super-rich. The fourth paper by Li, Li, and Wan (LLW) is on top incomes in China and it attempts to correct for this bias using income information for the Chinese super-rich from various sources. They conclude that the Gini coefficient of income inequality increases substantially when samples of top incomes are incorporated.Finally, Gradín and Wu (GW) analyse in the fifth and final study the distribution of income and expenditure in China in a telling comparative perspective with India. Both countries represent two extreme cases in the relationship of inequality using both wellbeing indicators. It emerges that the joint distribution of income and expenditure differs between China and India because there is a higher prevalence of people with a large mismatch between their ranks in income and consumption in India, especially in rural areas, and particularly amongst those reporting low income and high expenditure. The main compositional effects identified are the different demographic and geographical composition of the countries’ populations, mostly the smaller households (especially in rural areas) and the higher level of urbanization in China than in India. The lack of consistency of cross-country comparisons based on income or expenditure calls for the use of hybrid inequality measures combining data on both provided they are available in the same survey.

3. Concluding remarks

The studies brought together in this special section provide telling insights about the trends in inequality in China from which scholars and policy makers can learn a great deal. In a global perspective, further increases in China’s mean income and wealth, both now above the global means, will begin to raise global between-country inequality. This is important in and of itself. Moreover, while we cannot expect that all the world’s poorest countries will follow the same path as China considering that the initial conditions and the international context they face will be very different, the experiences from China do reinforce the observation that much can be done by policy to influence inequality outcomes. In particular, and as argued by Gradin, Leibbrandt, & Tarp, 2020 (forthcoming):“well-functioning labour markets that promote job-creation, decent pay and social inclusion, removing any legal or de facto discrimination based on gender, race, ethnicity or place of origin, providing equal access to human and physical capital, and empowering the most disadvantaged population groups, are a key driver of increased equality”.These insights also emerge clearly from the five China studies in this special section.