Household income dynamics in rural China

Arbeitspapier

It is well known in theory that certain forms of non-linear dynamics in household incomes can yield poverty traps and distribution-dependent growth. The potential implications for policy are dramatic: effective social protection from transient poverty will be an investment with lasting benefits, and pro-poor redistribution will promote aggregate economic growth. We test for non-linearity in the dynamics of household expenditures and incomes using panel data for rural south-west China. While we find evidence of non-linearity, there is no sign of a dynamic poverty trap. Existing private and social arrangements in this setting appear to protect vulnerable households from the risk of destitution. However, the concavity we find in the recursion diagram does imply that the speed of recovery from an income shock is lower for the poor, and that current inequality reduces growth in mean incomes.

Object Details

• ISBN: 9291901393
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Discussion Paper ; No. 2002/10

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Measurement and Analysis of Poverty ; Economic Development: Human Resources; Human Development; Income Distribution; Migration ; Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
• Subject: income dynamics ; poverty ; multiple equilibria ; China ; Haushaltseinkommen ; Verbraucherausgaben ; Ländliche Armut ; Ländlicher Raum ; Haushaltsbudget-Statistik ; China

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jalan, Jyotsna ; Ravallion, Martin
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/52841
• Last update: 10.03.2025, 11:42 AM CET