IDEAS home Printed from https://ideas.repec.org/a/hpe/journl/y2024v248i1p3-20.html
   My bibliography  Save this article

The Welfare (Inequality and Growth) Effects of Urbanization: Empirical Evidence from China

Author

Listed:
  • Xiaoshan Hu

    (Shanghai DianJi University)

  • Weirui Jiang

    (Fudan University)

  • Guanghua Wan

    (Fudan University)

  • Jiehao Zhang

    (Fudan University)

Abstract

Combining household survey and aggregate provincial data, this paper explores the overall social welfare (growth plus inequality) effect of unprecedented urbanization in China. It is found that (1) urbanization does help raise income, particularly for rural residents and the relatively poor; (2) urbanization is one of the most important contributors to rising inequality in China. However, such adverse influence has been declining over time; and (3) the overall welfare (inequality plus growth) impact of urbanization is positive and rising. It can thus be concluded that public policy makers in China shall devote efforts to promote rather than slow down urbanization in China despite its short-run adverse distributional effect.

Suggested Citation

  • Xiaoshan Hu & Weirui Jiang & Guanghua Wan & Jiehao Zhang, 2024. "The Welfare (Inequality and Growth) Effects of Urbanization: Empirical Evidence from China," Hacienda Pública Española / Review of Public Economics, IEF, vol. 248(1), pages 3-20, March.
    • Handle: RePEc:hpe:journl:y:2024:v:248:i:1:p:3-20
    as

    Download full text from publisher

    File URL: https://hpe-rpe.org/wp-admin/admin-ajax.php?juwpfisadmin=false&action=wpfd&task=file.download&wpfd_category_id=239&wpfd_file_id=5393&token=007d54a98b3779b630b4c640eebbaae5&preview=1
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Junpeng Li & Wanglin Ma & Alan Renwick & Hongyun Zheng, 2020. "The impact of access to irrigation on rural incomes and diversification: evidence from China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 12(4), pages 705-725, September.
    2. Bertinelli, Luisito & Black, Duncan, 2004. "Urbanization and growth," Journal of Urban Economics, Elsevier, vol. 56(1), pages 80-96, July.
    3. J. Vernon Henderson, 2010. "Cities And Development," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 515-540, February.
    4. James J. Heckman & John Eric Humphries & Gregory Veramendi, 2018. "Returns to Education: The Causal Effects of Education on Earnings, Health, and Smoking," Journal of Political Economy, University of Chicago Press, vol. 126(S1), pages 197-246.
    5. Frederick Solt, 2020. "Measuring Income Inequality Across Countries and Over Time: The Standardized World Income Inequality Database," Social Science Quarterly, Southwestern Social Science Association, vol. 101(3), pages 1183-1199, May.
    6. Junpeng Li & Wanglin Ma & Alan Renwick & Hongyun Zheng, 2020. "The impact of access to irrigation on rural incomes and diversification: evidence from China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 12(4), pages 705-725, September.
    7. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 979-1014.
    8. Anthony Shorrocks & Guanghua Wan, 2005. "Spatial decomposition of inequality," Journal of Economic Geography, Oxford University Press, vol. 5(1), pages 59-81, January.
    9. Ma, Wanglin & Renwick, Alan & Nie, Peng & Tang, Jianjun & Cai, Rong, 2018. "Off-farm work, smartphone use and household income: Evidence from rural China," China Economic Review, Elsevier, vol. 52(C), pages 80-94.
    10. Branko Milanović, 2000. "Determinants of Cross-Country Income Inequality: An ‘Augmented’ Kuznets Hypothesis," Palgrave Macmillan Books, in: Vojmir Franičević & Milica Uvalić (ed.), Equality, Participation, Transition, chapter 4, pages 48-79, Palgrave Macmillan.
    11. Wan, Guanghua, 2004. "Accounting for income inequality in rural China: a regression-based approach," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 348-363, June.
    12. Luis Angeles, 2010. "An alternative test of Kuznets’ hypothesis," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 463-473, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hongyun Zheng & Wanglin Ma, 2023. "Smartphone-based information acquisition and wheat farm performance: insights from a doubly robust IPWRA estimator," Electronic Commerce Research, Springer, vol. 23(2), pages 633-658, June.
    2. Junpeng Li & Puneet Vatsa & Wanglin Ma, 2023. "Small Acts With Big Impacts: Does Garbage Classification Improve Subjective Well-Being in Rural China?," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 18(3), pages 1337-1363, June.
    3. Awal Abdul‐Rahaman & Gazali Issahaku & Wanglin Ma, 2023. "Agrifood system participation and production efficiency among smallholder vegetable farmers in Northern Ghana," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 812-835, July.
    4. Kiratu, Nixon Murathi & Aarnoudse, Eefje & Petrick, Martin, 2024. "Irrigation-nutrition linkages under farmer-led and public irrigation schemes in Kenya," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344347, International Association of Agricultural Economists (IAAE).
    5. Marie Connolly & Catherine Haeck & Jean-William P. Laliberté, 2021. "Parental Education and the Rising Transmission of Income between Generations," NBER Chapters, in: Measuring Distribution and Mobility of Income and Wealth, pages 289-315, National Bureau of Economic Research, Inc.
    6. Perdamen Sagala & Takahiro Akita & Arief Yusuf, 2014. "Urbanization and expenditure inequality in Indonesia: testing the Kuznets hypothesis with provincial panel data," Letters in Spatial and Resource Sciences, Springer, vol. 7(3), pages 133-147, October.
    7. Stanislav Avdeev, 2020. "Zero Returns To Higher Education: Evidence From A Natural Experiment," HSE Working papers WP BRP 236/EC/2020, National Research University Higher School of Economics.
    8. Wannaphong Durongkaveroj, 2024. "Structural transformation and inequality: Does trade openness matter?," The World Economy, Wiley Blackwell, vol. 47(6), pages 2631-2663, June.
    9. Mohitosh Kejriwal & Xiaoxiao Li & Evan Totty, 2020. "Multidimensional skills and the returns to schooling: Evidence from an interactive fixed‐effects approach and a linked survey‐administrative data set," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 35(5), pages 548-566, August.
    10. Xiaoheng Zhang & Wanglin Ma & Puneet Vatsa & Shijie Jiang, 2023. "Short supply chain, technical efficiency, and technological change: Insights from cucumber production," Agribusiness, John Wiley & Sons, Ltd., vol. 39(2), pages 371-386, March.
    11. Gehrsitz, Markus & Williams, Jr., Morgan C., 2024. "The Effects of Compulsory Schooling on Health and Hospitalization over the Life Cycle," IZA Discussion Papers 17050, Institute of Labor Economics (IZA).
    12. Hongyun Zheng & Puneet Vatsa & Wanglin Ma & Dil Bahadur Rahut, 2023. "Does agricultural cooperative membership influence off‐farm work decisions of farm couples?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(3), pages 831-855, September.
    13. Philipp Ehrl, 2014. "A breakdown of residual wage inequality in Germany," Working Papers 150, Bavarian Graduate Program in Economics (BGPE).
    14. Abbas, Syed Ali & Selvanathan, Saroja & Selvanathan, Eliyathamby A., 2023. "Structural transformation, urbanization, and remittances in developing countries: A panel VAR analysis," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 55-69.
    15. Ma, Wanglin & Vatsa, Puneet & Zheng, Hongyun & Rahut, Dil Bahadur, 2022. "Nonfarm employment and consumption diversification in rural China," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 582-598.
    16. Jiang, Xuan & Kennedy, Kendall & Zhong, Jiatong, 2023. "When Opportunity Knocks: China's Open Door Policy and Declining Educational Attainment," Labour Economics, Elsevier, vol. 81(C).
    17. Merter Akinci, 2018. "Inequality and economic growth: Trickle†down effect revisited," Development Policy Review, Overseas Development Institute, vol. 36(S1), pages 1-24, March.
    18. Vatsa, Puneet & Ma, Wanglin & Zheng, Hongyun & Li, Junpeng, 2023. "Climate-smart agricultural practices for promoting sustainable agrifood production: Yield impacts and implications for food security," Food Policy, Elsevier, vol. 121(C).
    19. Yang, Wei & Vatsa, Puneet & Ma, Wanglin & Zheng, Hongyun, 2023. "Does mobile payment adoption really increase online shopping expenditure in China: A gender-differential analysis," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 99-110.
    20. Lewandowska Aleksandra & Piasecki Adam, 2019. "Selected aspects of water and sewage management in Poland in the context of sustainable urban development," Bulletin of Geography. Socio-economic Series, Sciendo, vol. 45(45), pages 149-157, September.

    More about this item

    Keywords

    Social welfare; Inequality; Urbanization; China;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hpe:journl:y:2024:v:248:i:1:p:3-20. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Miguel Gómez de Antonio (email available below). General contact details of provider: https://edirc.repec.org/data/iefgves.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.