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

Wei Ha, Junjian Yi (), Ye Yuan and Junsen Zhang

China Economic Review, 2016, vol. 37, issue C, 27-39

Abstract: 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.

Keywords: Inequality; Migration; System GMM (search for similar items in EconPapers)
JEL-codes: C33 D31 J61 O15 (search for similar items in EconPapers)
Date: 2016
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China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

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