Household Income Dynamics in Rural China

By J. Jalan, M. Ravallion. 2001

156 citations recorded by the source corpus.

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.

Subfields: Safety Research, Sociology and Political Science, Soil Science

View Paper: https://www.semanticscholar.org/paper/aea1e06f391e2779a64824a008ca5f85b826df80

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Citations in the corpus

Ending Extreme Poverty and Sharing Prosperity: Progress and Policies (2015, background): “For example, although China’s rate of poverty reduction has been rapid, poverty is higher in rural areas where the productivity of farmers’ investments is lower (Jalan and Ravallion 2001).”
Rural Poverty (2009, background): “For a review of a broad set of means of offering “insurance” to the poor, see Dercon (2003) and the contributions therein.”
The Economics of Poverty Traps and Persistent Poverty: Empirical and Policy Implications (2013, background): “Macro-scale traps can originate because of institutional phenomena (Acemoglu, Johnson, & Robinson, 2001) or disadvantages of physical geography that afflict all residents in nations or regions (Jalan & Ravallion, 2005).”
Growth and shocks: evidence from rural Ethiopia (2004, background): “Jalan and Ravallion (1997, 1998, 2002, 2004) , divergence due to spatial factors is explicitly tested for and discovered, suggesting spatial poverty traps.”
Welfare dynamics in rural Kenya and Madagascar (2006, background): “Gunning et al. 2000, Elbers et al. 2002, Jalan and Ravallion 2002, 2004, Deininger and Okidi 2003, Dercon 2004).”
Well-Being Dynamics and Poverty Traps (2016, methodology): “3 The difference between Jalan and Ravallion (2002) and their (2004) paper using the same region and data is that the earlier paper accounts for geographic externalities whereas the latter paper considers only returns to wealth at the farm-household level.”
Vulnerability and poverty dynamics in Vietnam (2011, background): “…interest in measuring vulnerability in developing countries (see, e.g. Pritchett et al., 2000; Chaudhuri et al., 2002; Chaudhuri, 2003; Hoddinott and Quisumbing, 2003a, b; Ligon and Schechter, 2003; Gaiha and Imai, 2004, 2009; Dercon, 2005; Jalan and Ravallion, 2005; Ligon, 2005; Kurosaki, 2007).”
Poverty traps and nonlinear income dynamics with measurement error and individual heterogeneity (2005, unknown): “Jalan and Ravallion (2004) obtain similar findings using a six-year panel of income from four provinces in China.”
Understanding poverty dynamics in Kenya (2010, unknown): “Several recent studies use an explicit growth model and consumption or expenditure measures to study rural household-level poverty dynamics (Baulch and Hoddinott, 2000; Deininger and Okidi, 2003; Jayne et al., 2003; Dercon, 2004; Jalan and Ravallion, 2004).”