Non-agricultural Employment Determinants and Income Inequality Decomposition

Xiaoyun Liu () and Terry Sicular ()

No 20086, University of Western Ontario, Economic Policy Research Institute Working Papers from University of Western Ontario, Economic Policy Research Institute

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.

Keywords: non-agricultural income; employment; inequality (search for similar items in EconPapers)
JEL-codes: D63 J23 J43 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-dev, nep-lab and nep-tra
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