Poverty in Shenzhen

The assessment and alleviation of poverty remains an urgent question throughout the globe. Urban poverty, in particular is becoming more prevalent in China due to immense migration in recent years. To what extent is migration related to poverty, and do the factors that drag households into poverty differ between migrants and non-migrants? Do migrants face income discrimination resulting in poverty? Shenzhen, one of the most highly developed cities in mainland China, with unprecedented growth and a huge migrant population and major income inequality, is an especially interesting case. Does everyone participate in the drastically increasing prosperity or are some population groups left behind? We use the 2005 Shenzhen household survey which explicitly includes migrants to investigate these questions. Using new purchasing power parity prices from the World Bank’s International Comparison Project, corrected by a regional expense basket, we estimate poverty in Shenzhen. We find that severe poverty is low in Shenzhen but that relative poverty is significant. We conduct Probit, Tobit and OLS regressions to examine the connections between migratory status and poverty. We find that migrants are much more at risk, and that the causes of poverty differ drastically from those that apply in the case of their non-migrant counterparts. Several of the causes of poverty are social in nature or due to discrimination and will remain a problem for poverty alleviation.