Regional inequality and labor transfers in China

Studies using data from various sources have shown that inequality between coastal and inland regions of China was large and growing in the 1990s. Growing regional inequality is worrisome because it is one of the most significant contributors to the rapidly rising overall income inequality in China. To address the issue of regional income divergence, it is necessary to study the mobility of people across regions. With the recently available 2000 population census, we are able to examine changes in regional income disparity between 1990 and 2000 and population migration in the same period The article is organized as follows. In Section II, we establish the diverging trend in coastal-inland inequality and account for the change in coastal-inland inequality by decomposing the overall change into components due to within- and between-region changes. In Section III, we present statistics on interprovincial migration between 1990 and 2000 and examine the responsiveness of interprovincial migration to income differences in the 1980s and 1990s. Section IV summarizes the results and provides further discussions. © 2004 by The University of Chicago. All rights reserved.