Urbanization and Income Inequality in Post-Reform China: A Causal Analysis Based on Time Series Data
Name
journal.pone.0158826.PDF
Size
1.08 MB
Format
Adobe PDF
Checksum (MD5)
e8208a63d9303dcf3a653bac078f870c
Author(s)
Chen, Guo
Zhang, Min
Shao, Yang
Glasmeier, Amy K
Date Issued
July 2016
Journal
PLOS ONE
Publisher
Public Library of Science
Citation
Chen, Guo et al. “Urbanization and Income Inequality in Post-Reform China: A Causal Analysis Based on Time Series Data.” Edited by Cathy W.S. Chen. PLOS ONE 11, 7 (July 2016): e0158826 © 2016 Chen et al
Version
Final published version
Abstract
This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. This paper investigates the potential causal relationship(s) between China's urbanization and income inequality since the start of the economic reform. Based on the economic theory of urbanization and income distribution, we analyze the annual time series of China's urbanization rate and Gini index from 1978 to 2014. The results show that urbanization has an immediate alleviating effect on income inequality, as indicated by the negative relationship between the two time series at the same year (lag = 0). However, urbanization also seems to have a lagged aggravating effect on income inequality, as indicated by positive relationship between urbanization and the Gini index series at lag 1. Although the link between urbanization and income inequality is not surprising, the lagged aggravating effect of urbanization on the Gini index challenges the popular belief that urbanization in post-reform China generally helps reduce income inequality. At deeper levels, our results suggest an urgent need to focus on the social dimension of urbanization as China transitions to the next stage of modernization. Comprehensive social reforms must be prioritized to avoid a long-term economic dichotomy and permanent social segregation.
MIT Department
Massachusetts Institute of Technology. Department of Urban Studies and Planning
Terms of Use
Creative Commons Attribution 4.0 International License
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DOI of Published Version
https://doi.org/10.1371/JOURNAL.PONE.0158826
