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Income inequality and rural poverty in China

Income inequality and rural poverty in China Purpose – The purpose of this paper is to apply a poverty level decomposition approach to decompose the poverty by income sources and investigate the impact of government transfers on income inequality and rural poverty. Design/methodology/approach – This paper uses the decomposition method of inequality and the decomposition method of poverty level by resource endowments to decompose the overall inequality and the overall poverty by income sources. Findings – It is found that unequal income distribution rather than income endowments is mainly responsible for the existence of poverty. Government transfers and relief income, aiming at the poor, help alleviate inequality and poverty, but are not targeting the poorest. Unequal distribution of production subsidies actually lead to higher poverty incidence. Research limitations/implications – This paper has revealed that the poverty issue cannot be resolved with economic development alone if the issues including the inequality in income distribution are not solved. It is important to make government transfers/subsidies pro-poor. Originality/value – A poverty level decomposition approach is first used to decompose the poverty by income sources in China. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png China Agricultural Economic Review Emerald Publishing

Income inequality and rural poverty in China

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1756-137X
DOI
10.1108/CAER-01-2014-0005
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to apply a poverty level decomposition approach to decompose the poverty by income sources and investigate the impact of government transfers on income inequality and rural poverty. Design/methodology/approach – This paper uses the decomposition method of inequality and the decomposition method of poverty level by resource endowments to decompose the overall inequality and the overall poverty by income sources. Findings – It is found that unequal income distribution rather than income endowments is mainly responsible for the existence of poverty. Government transfers and relief income, aiming at the poor, help alleviate inequality and poverty, but are not targeting the poorest. Unequal distribution of production subsidies actually lead to higher poverty incidence. Research limitations/implications – This paper has revealed that the poverty issue cannot be resolved with economic development alone if the issues including the inequality in income distribution are not solved. It is important to make government transfers/subsidies pro-poor. Originality/value – A poverty level decomposition approach is first used to decompose the poverty by income sources in China.

Journal

China Agricultural Economic ReviewEmerald Publishing

Published: Feb 2, 2015

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