Urbanization, Urban-Biased Policies, and Urban-Rural Inequality in China, 1987-2001

Ming Lu and Zhao Chen

Chinese Economy, 2006, vol. 39, issue 3, 42-63

Abstract: Post-reform economic policies in China have been biased toward urban residents and have contributed to the increasing urban-rural inequality. Analysis of the provincial panel data during 1987-2001 shows that urbanization significantly narrowed the urban-rural inequality. We also find that interprovincial migration, economic opening, and governmental participation in economic activity are contributing to the expanding urban-rural inequality. The structure of governmental expenditure is also found to have significant effects on urban-rural inequality.

Date: 2006
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