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THE REGIONAL INCOME GAP AND CHANGES IN RURAL CHINA DURING 1995 TO 2008:BASED ON THE DECOMPOSITION OF GINI INDEX

Yang Du

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Abstract

Based on the provincial panel data,we decompose the Gini index of Chinese rural areas and conclude that the regional income inequality in rural China shows an increasing trend.The Gini coefficient increased 0.0639 during 1995-2008,but the growing rate decreased after 2005.The Gini coefficient changes and the contribution of the wage income of rural residents on the Gini coefficient changes are consistent with the changes of economic development.Moreover,according to the decomposition of Gini index,the structural effect is no longer the only composition of income inequality in rural China,and the effect of income concentration plays an important role in the increase of Gini coefficient.The change of the composition of regional income inequality in Chinese rural areas indicates that China is facing a challenge of adjusting its policies for decreasing the rural income gap.

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What this paper is about

Based on the provincial panel data,we decompose the Gini index of Chinese rural areas and conclude that the regional income inequality in rural China shows an increasing trend.The Gini coefficient increased 0.0639 during 1995-2008,but the growing rate decreased after 2005.The Gini coefficient changes and the contribution of the wage income of rural residents on the Gini coefficient changes are consistent with the changes of economic development.Moreover,according to the decomposition of Gini index,the structural effect is no longer the only composition of income inequality in rural China,and the effect of income concentration plays an important role in the increase of Gini coefficient.The change of the composition of regional income inequality in Chinese rural areas indicates that China is facing a challenge of adjusting its policies for decreasing the rural income gap.

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Available abstract

Based on the provincial panel data,we decompose the Gini index of Chinese rural areas and conclude that the regional income inequality in rural China shows an increasing trend.The Gini coefficient increased 0.0639 during 1995-2008,but the growing rate decreased after 2005.The Gini coefficient changes and the contribution of the wage income of rural residents on the Gini coefficient changes are consistent with the changes of economic development.Moreover,according to the decomposition of Gini index,the structural effect is no longer the only composition of income inequality in rural China,and the effect of income concentration plays an important role in the increase of Gini coefficient.The change of the composition of regional income inequality in Chinese rural areas indicates that China is facing a challenge of adjusting its policies for decreasing the rural income gap.

Key concepts: Gini coefficient, Index (typography), Economics, China, Economic inequality, Income distribution, Inequality, Demographic economics

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THE REGIONAL INCOME GAP AND CHANGES IN RURAL CHINA DURING 1995 TO 2008:BASED ON THE DECOMPOSITION OF GINI INDEX — Research Paper | ScholarLens