Please wait a minute...
Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front. Econ. China    2016, Vol. 11 Issue (4) : 608-634
Orginal Article |
Income Mobility and Income Inequality in Rural China
Matthieu Clément()
GREThA, Université de Bordeaux, 33608 Pessac Cedex, France
 Download: PDF(3702 KB)  
 Export: BibTeX | EndNote | Reference Manager | ProCite | RefWorks

The economic literature has argued for a long time that income mobility could attenuate the degree of cross-sectional inequality by offering people opportunities to improve their socio-economic position. Using the longitudinal data from the China Health and Nutrition Survey (CHNS) from 1989 to 2011, we measure income mobility as the degree to which longer-term incomes are distributed more or less equally than yearly income. Five main results are emphasized. First, there is strong income mobility in rural China that partly offsets yearly income inequality. Second, income mobility has decreased since the 2000s, indicating that income distribution is becoming more rigid. Third, mobility is mainly associated with transitory income fluctuations, particularly in the two tails of the distribution. Fourth, income mobility has an equalizing effect on income distribution. Fifth, we show that non-agricultural income mobility has substantially increased over the period and that its equalizing nature has also recently increased. While the development of the non-agriculture sector in rural China was a crucial factor in explaining the increase in rural inequality until the mid-2000s, we suggest that the large-scale generalisation of such non-agricultural opportunities partly accounts for the decline in rural inequality observed since the mid-2000s.

Keywords income inequality      income mobility      rural areas      China     
Issue Date: 20 January 2017
 Cite this article:   
Matthieu Clément. Income Mobility and Income Inequality in Rural China[J]. Front. Econ. China, 2016, 11(4): 608-634.
[1] Hongzhong Yan, Zhijian Qiao, Chen Xu. A Multi-Layer System and Its Features: Reconceptualizing the Monetary Regime of Late Qing and Modern China[J]. Front. Econ. China, 2018, 13(3): 436-457.
[2] Yi Xu, Bas van Leeuwen, Jan Luiten van Zanden. Urbanization in China, ca. 1100–1900[J]. Front. Econ. China, 2018, 13(3): 322-368.
[3] Jinsong Zhao, Hao Pang. Surviving Unstable Property Rights in Early Modern China: A Case Study of Young Brother Bank[J]. Front. Econ. China, 2018, 13(3): 505-530.
[4] Joseph E. Stiglitz. Rethinking Globalization in the Trump Era: US-China Relations[J]. Front. Econ. China, 2018, 13(2): 133-146.
[5] Shiqiang Li. Decision Making and Ability: An Explanation of Elitism in China’s Government[J]. Front. Econ. China, 2017, 12(4): 635-659.
[6] Marlies Schütz, Han Li, Nicole Palan. Are Central and Western Chinese Provinces Catching up with the East? An Empirical Analysis of Convergence Processes across China[J]. Front. Econ. China, 2017, 12(4): 571-606.
[7] Lihui Wang, Junyi Shen. Examining the Factors Affecting Personal Income: An Empirical Study Based on Survey Data in Chinese Cities[J]. Front. Econ. China, 2017, 12(4): 515-544.
[8] William Charles Sawyer, Kiril Tochkov, Wenting Yu. Regional and Sectoral Patterns and Determinants of Comparative Advantage in China[J]. Front. Econ. China, 2017, 12(1): 7-36.
[9] Binlei Gong. Improving the Accuracy of Estimated Returns to Education in China—Based on Employment Rate, Career Length, and Income Growth[J]. Front. Econ. China, 2017, 12(1): 113-131.
[10] Steven Globerman. A Policy Perspective on Outward Foreign Direct Investment by Chinese State-Owned Enterprises[J]. Front. Econ. China, 2016, 11(4): 537-547.
[11] Yafang Yu. Testing Commitment Models of Monetary Policy in China[J]. Front. Econ. China, 2016, 11(4): 668-693.
[12] Tan Li,Larry Qiu,Ying Xue. Understanding China’s Foreign Trade Policy: A Literature Review[J]. Front. Econ. China, 2016, 11(3): 410-438.
[13] Xu Li,Xiang Shao,Zhigang Tao. Hollowing out of the Real Economy: Evidence from China’s Listed Firms[J]. Front. Econ. China, 2016, 11(3): 390-409.
[14] Xiaobing Wang,Jenifer Piesse,Zhengmao Ye. Labour Markets in China: A Study of the Structure and Evolution of Wages[J]. Front. Econ. China, 2016, 11(2): 265-301.
[15] Guoqiang Tian. China’s Reform: History, Logic and Future[J]. Front. Econ. China, 2016, 11(2): 210-231.
Full text