Analysis of the Determinants of Income and Income Gap between Urban and Rural China

Biwei Su () and Almas Heshmati ()
Additional contact information
Biwei Su: Korea University

No 7162, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper studies on the determinants of income and urban-rural income gap to shed light on the problem of urban-rural income inequality in China. OLS, conditional quantile regression and Blinder-Oaxaca decomposition methods are used to analyze four waves of the China Health and Nutrition Survey (CHNS) household data. Results show that education and occupation are essential determinants of households' income level. These two factors exert heterogeneous effects at different percentiles of the income distribution. In urban areas, education is more valued for high income earners, while for rural areas, specialized or tertiary education are more beneficial for the poorer households. Among all occupational types, farm activities show much lower returns than other types; and this is more evident for individuals at the left tail of the income distribution. We also find that for the sampled provinces, urban-rural income gap increases from the year of 2000 to 2004 but the gap decreases from 2004 to 2009. The income gap can be largely explained by the individuals' attributes, especially by level of education and type of occupation.

Keywords: quantile regression; Oaxaca-Blinder decomposition; urban-rural income gap; CHNS household data; China (search for similar items in EconPapers)
JEL-codes: C31 D31 D63 O15 O18 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2013-01
New Economics Papers: this item is included in nep-agr, nep-dev, nep-lma, nep-pbe and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Published - published in: China Economic Policy Review, 2013, 2(1), 1-29.

Downloads: (external link)
https://docs.iza.org/dp7162.pdf (application/pdf)

Related works:
Journal Article: ANALYSIS OF THE DETERMINANTS OF INCOME AND INCOME GAP BETWEEN URBAN AND RURAL CHINA (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp7162

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().