Spatial Inequality and Housing in China

57 Pages Posted: 25 May 2018 Last revised: 6 Sep 2019

See all articles by Thomas Fischer

Thomas Fischer

Lund University - School of Economics and Management; Darmstadt University of Technology

Date Written: July 1, 2019


This paper discusses the role of housing for the structural transformation of an economy away from the agricultural to the manufacturing sector in a general equilibrium model. The model explains evidence from China (1978-2015). Due to the urban-rural wage gap there is domestic migration from the rural to the urban areas. The resulting increase in urban house prices can constitute an endogenous barrier to further urbanization. Despite massive growth the inequality of income is not on the decline. Increasing housing prices increase within-urban inequality and also lock in urban-rural wage differences. The calibrated model explains current and projects future development in China.

Keywords: China, structural transformation, urban-rural divide, regional migration, housing, inequality

JEL Classification: O18, R3, R12, D3, R23

Suggested Citation

Fischer, Thomas, Spatial Inequality and Housing in China (July 1, 2019). Available at SSRN: or

Thomas Fischer (Contact Author)

Lund University - School of Economics and Management ( email )

Tycho Brahes väg 1,
S-220 07 Lund, 223 63

Darmstadt University of Technology ( email )

Darmstadt, Hesse D-64289

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