Poverty, Inequality, and Growth in Urban China, 1986-2000

41 Pages Posted: 6 Jan 2005  

Xin Meng

Australian National University; IZA Institute of Labor Economics

Robert Gregory

Australian National University (ANU) - Research School of Social Sciences (RSSS); IZA Institute of Labor Economics

Youjuan Wang

National Bureau of Statistics of China (NBS)

Date Written: January 2005

Abstract

Although urban China has experienced spectacular income growth over the last two decades, increases in inequality, reduction in social welfare provision, deregulation of grain prices, and increases in income uncertainty in the 1990s have increased urban poverty. Using a large repeated cross-section household survey data from 1986 to 2000, this study maps out the change in income, inequality, and poverty over the 15 year period and investigates the determinants of poverty. It is found that the increase in the poverty rate in the 1990s is associated with the increase in the relative food price, and the need to spend on education, housing and medical care which were previously paid by the state. In addition, the increase in the saving rate of the poor due to an increase in income uncertainty contributes significantly to the increase in poverty measured in terms of expenditure. Even though income growth reduces poverty, the radical reform measures implemented in the 1990s have sufficiently offset this gain that urban poverty is higher in 2000 than in 1986.

Keywords: poverty, income growth, inequality, China

JEL Classification: I31, D31, O40, O15

Suggested Citation

Meng, Xin and Gregory, Robert and Wang, Youjuan, Poverty, Inequality, and Growth in Urban China, 1986-2000 (January 2005). IZA Discussion Paper No. 1452. Available at SSRN: https://ssrn.com/abstract=644327

Xin Meng (Contact Author)

Australian National University ( email )

Research School of Economics
College of Business and Economics
Canberra ACT 0200
Australia
+61 26249 3102 (Phone)

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Robert Gregory

Australian National University (ANU) - Research School of Social Sciences (RSSS) ( email )

Canberra, Australian Capital Territory 0200
Australia

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Youjuan Wang

National Bureau of Statistics of China (NBS)

No. 75, Yuetan Nanjie
Sanlihe, Xicheng District
Beijing 100826
China

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