Spatial Inequality and Housing in China

63 Pages Posted: 27 May 2021 Last revised: 5 Dec 2022

See all articles by Thomas Fischer

Thomas Fischer

Lund University - School of Economics and Management

Date Written: January 1, 2021

Abstract

This paper investigates the evolution of inequality in China (1978-2015) through the lens of a dynamic spatial general equilibrium model with migration and capital formation. Due to an urban-rural income gap there is domestic migration from the rural to the urban areas which tends to reduce inequality. The resulting increase in urban house prices can, however, constitute an endogenous barrier to further urbanization. Increasing housing prices increase within-urban inequality between renters and landlords and also lock in urban-rural wage differences. The calibrated model explains current, and projects future, development in China.

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

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

Suggested Citation

Fischer, Thomas, Spatial Inequality and Housing in China (January 1, 2021). Available at SSRN: https://ssrn.com/abstract=3770652 or http://dx.doi.org/10.2139/ssrn.3178610

Thomas Fischer (Contact Author)

Lund University - School of Economics and Management ( email )

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

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