Rural-urban Migration and Dynamics of Income Distribution in China:A Non-parametric Approach

Extending the income dynamics approach in Quah(2003),the present paper studies the enlarging income inequality in China over the past three decades from the viewpoint of rural-urban migration and economic transition.We establish non-parametric estimations of rural and urban income distribution functions in China,and aggregate a population- weighted,nationwide income distribution function taking into account rural-urban differences in technological progress and price indexes.We calculate 12 inequality indexes through non-parametric estimation to overcome the biases in existing parametric estimation and,therefore,provide more accurate measurement of income inequality.Policy implications have been drawn based on our research.