Growing apart: Declining within- and across-locality insurance in rural China

Orazio Attanasio, Costas Meghir, Corina Mommaerts and Yu Zheng

Journal of Development Economics, 2025, vol. 172, issue C

Abstract: We consider risk sharing in rural China during its rapid economic transformation from the late 1980s through the late 2000s. We document an erosion of consumption insurance against both household-level idiosyncratic and village-level aggregate income shocks, and show that this decline is related to observable economic changes: the shift out of agriculture, the decline of publicly owned Township-and-Village Enterprises, and increased migrant work. Further evidence suggests that as these changes took place at the village level, higher levels of government failed to offset these effects through the tax-and-transfer system, leaving households more exposed to both idiosyncratic and village-aggregate risk.

Keywords: Consumption insurance; Economic growth; China; Risk-sharing (search for similar items in EconPapers)
Date: 2025
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Related works:
Working Paper: Growing Apart: Declining Within- and Across-Locality Insurance in Rural China (2022)
Working Paper: Growing Apart: Declining Within- and Across-Locality Insurance in Rural China (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:172:y:2025:i:c:s0304387824001159

DOI: 10.1016/j.jdeveco.2024.103366

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