Household Income Dynamics in Rural China

Theoretical work has shown that nonlinear dynamics in household incomes can yield poverty traps and distribution-dependent growth. If this is true, the potential implications for policy are dramatic: effective social protection from transient pover...

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Main Authors:	Jalan, Jyotsna, Ravallion, Martin
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ADJUSTMENT PROCESS ADVERSE IMPACT AGRICULTURAL PRODUCTION AGRICULTURE AUTOREGRESSION BUSINESS CYCLE CAPITAL ACCUMULATION CHRONIC POVERTY CHRONICALLY POOR COMPARATIVE ECONOMICS CONSUMPTION GROWTH CONSUMPTION INSURANCE CONSUMPTION SMOOTHING COUNTRY REGRESSIONS CREDIT MARKET DATA MODEL DATA SET DEPENDENT VARIABLE DEVELOPMENT ECONOMICS DYNAMIC PANEL ECONOMETRIC MODEL ECONOMETRICS ECONOMIC DYNAMICS ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMIC STUDIES ECONOMIC THEORY ECONOMICS RESEARCH EMPIRICAL WORK EMPLOYMENT EQUILIBRIUM EXPENDITURES FAMINE FINANCIAL CRISES FINANCIAL DEVELOPMENT FINANCIAL POLICIES FORESTRY GROWTH MODELS GROWTH RATE GROWTH THEORIES HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD SURVEYS INCOME INCOME GROUPS INCOME INEQUALITY INCOME REDISTRIBUTION INCOME RISK INCOME SHOCKS INCOMES INCREASING FUNCTION INDEPENDENT MEASUREMENT INDEPENDENT MEASUREMENT ERROR INFLATION INFORMAL INSURANCE INSURANCE LABOR PRODUCTIVITY LAGGED DEPENDENT LAND USE LDCS LINEAR MODEL LIQUIDITY LIVING STANDARDS LONG-RUN EQUILIBRIA LONG-RUN EQUILIBRIUM LOW INCOMES MACROECONOMICS MARKET ECONOMIES MARKET FAILURES MEAN CONSUMPTION MEAN INCOME MEAN INCOMES MEASUREMENT ERROR MONETARY POLICY MONOPOLIES MULTIPLE EQUILIBRIA NEGATIVE SHOCK PERMANENT INCOME POLICY RESEARCH POLICY STRATEGIES POOR POVERTY GAP POVERTY LINE PRODUCTIVITY PUBLIC ECONOMICS RAPID GROWTH RECIPROCITY REDISTRIBUTIVE POLICIES REPEATED SHOCKS SERIAL CORRELATION SERIAL DEPENDENCE SERIES OBSERVATIONS SURPLUS LABOR TARGETING TELECOMMUNICATIONS THEORETICAL MODELS TIME SERIES TRANSFER PAYMENTS TRANSITION ECONOMIES UNEMPLOYMENT WAR WEALTH HOUSEHOLD INCOME SOCIAL PROTECTION SYSTEMS REDISTRIBUTION INCOME GROWTH HOUSEHOLD CONSUMPTION WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2001/11/1631785/household-income-dynamics-rural-china http://hdl.handle.net/10986/19436

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recordtype	oai_dc
spelling	okr-10986-194362021-04-23T14:03:43Z Household Income Dynamics in Rural China Jalan, Jyotsna Ravallion, Martin ADJUSTMENT PROCESS ADVERSE IMPACT AGRICULTURAL PRODUCTION AGRICULTURE AUTOREGRESSION BUSINESS CYCLE CAPITAL ACCUMULATION CHRONIC POVERTY CHRONICALLY POOR COMPARATIVE ECONOMICS CONSUMPTION GROWTH CONSUMPTION INSURANCE CONSUMPTION SMOOTHING COUNTRY REGRESSIONS CREDIT MARKET DATA MODEL DATA SET DEPENDENT VARIABLE DEVELOPMENT ECONOMICS DYNAMIC PANEL ECONOMETRIC MODEL ECONOMETRICS ECONOMIC DYNAMICS ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMIC STUDIES ECONOMIC THEORY ECONOMICS RESEARCH EMPIRICAL WORK EMPLOYMENT EQUILIBRIUM EXPENDITURES FAMINE FINANCIAL CRISES FINANCIAL DEVELOPMENT FINANCIAL POLICIES FORESTRY GROWTH MODELS GROWTH RATE GROWTH THEORIES HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD SURVEYS INCOME INCOME GROUPS INCOME INEQUALITY INCOME REDISTRIBUTION INCOME RISK INCOME SHOCKS INCOMES INCREASING FUNCTION INDEPENDENT MEASUREMENT INDEPENDENT MEASUREMENT ERROR INFLATION INFORMAL INSURANCE INSURANCE LABOR PRODUCTIVITY LAGGED DEPENDENT LAND USE LDCS LINEAR MODEL LIQUIDITY LIVING STANDARDS LONG-RUN EQUILIBRIA LONG-RUN EQUILIBRIUM LOW INCOMES MACROECONOMICS MARKET ECONOMIES MARKET FAILURES MEAN CONSUMPTION MEAN INCOME MEAN INCOMES MEASUREMENT ERROR MONETARY POLICY MONOPOLIES MULTIPLE EQUILIBRIA NEGATIVE SHOCK PERMANENT INCOME POLICY RESEARCH POLICY STRATEGIES POOR POVERTY GAP POVERTY LINE PRODUCTIVITY PUBLIC ECONOMICS RAPID GROWTH RECIPROCITY REDISTRIBUTIVE POLICIES REPEATED SHOCKS SERIAL CORRELATION SERIAL DEPENDENCE SERIES OBSERVATIONS SURPLUS LABOR TARGETING TELECOMMUNICATIONS THEORETICAL MODELS TIME SERIES TRANSFER PAYMENTS TRANSITION ECONOMIES UNEMPLOYMENT WAR WEALTH HOUSEHOLD INCOME SOCIAL PROTECTION SYSTEMS REDISTRIBUTION INCOME GROWTH HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME WEALTH Theoretical work has shown that nonlinear dynamics in household incomes can yield poverty traps and distribution-dependent growth. If this is true, the potential implications for policy are dramatic: effective social protection from transient poverty would be an investment with lasting benefits, and pro-poor redistribution would promote aggregate economic growth. The authors test for nonlinearity in the dynamics of household incomes and expenditures using panel data for 6,000 households over six years in rural southwest China. While they find evidence of nonlinearity in the income and expenditure dynamics, there is no sign of a dynamic poverty trap. The authors argue that existing private and social arrangements in this setting protect vulnerable households from the risk of destitution. However, their findings imply that the speed of recovery from an income shock is appreciably slower for the poor than for others. They also find that current inequality reduces future growth in mean incomes, though the "growth cost" of inequality appears to be small. The maximum contribution of inequality is estimated to be 4-7 percent of mean income and 2 percent of mean consumption. 2014-08-19T18:04:32Z 2014-08-19T18:04:32Z 2001-11 http://documents.worldbank.org/curated/en/2001/11/1631785/household-income-dynamics-rural-china http://hdl.handle.net/10986/19436 English en_US Policy Research Working Paper;No. 2706 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific China
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ADJUSTMENT PROCESS ADVERSE IMPACT AGRICULTURAL PRODUCTION AGRICULTURE AUTOREGRESSION BUSINESS CYCLE CAPITAL ACCUMULATION CHRONIC POVERTY CHRONICALLY POOR COMPARATIVE ECONOMICS CONSUMPTION GROWTH CONSUMPTION INSURANCE CONSUMPTION SMOOTHING COUNTRY REGRESSIONS CREDIT MARKET DATA MODEL DATA SET DEPENDENT VARIABLE DEVELOPMENT ECONOMICS DYNAMIC PANEL ECONOMETRIC MODEL ECONOMETRICS ECONOMIC DYNAMICS ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMIC STUDIES ECONOMIC THEORY ECONOMICS RESEARCH EMPIRICAL WORK EMPLOYMENT EQUILIBRIUM EXPENDITURES FAMINE FINANCIAL CRISES FINANCIAL DEVELOPMENT FINANCIAL POLICIES FORESTRY GROWTH MODELS GROWTH RATE GROWTH THEORIES HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD SURVEYS INCOME INCOME GROUPS INCOME INEQUALITY INCOME REDISTRIBUTION INCOME RISK INCOME SHOCKS INCOMES INCREASING FUNCTION INDEPENDENT MEASUREMENT INDEPENDENT MEASUREMENT ERROR INFLATION INFORMAL INSURANCE INSURANCE LABOR PRODUCTIVITY LAGGED DEPENDENT LAND USE LDCS LINEAR MODEL LIQUIDITY LIVING STANDARDS LONG-RUN EQUILIBRIA LONG-RUN EQUILIBRIUM LOW INCOMES MACROECONOMICS MARKET ECONOMIES MARKET FAILURES MEAN CONSUMPTION MEAN INCOME MEAN INCOMES MEASUREMENT ERROR MONETARY POLICY MONOPOLIES MULTIPLE EQUILIBRIA NEGATIVE SHOCK PERMANENT INCOME POLICY RESEARCH POLICY STRATEGIES POOR POVERTY GAP POVERTY LINE PRODUCTIVITY PUBLIC ECONOMICS RAPID GROWTH RECIPROCITY REDISTRIBUTIVE POLICIES REPEATED SHOCKS SERIAL CORRELATION SERIAL DEPENDENCE SERIES OBSERVATIONS SURPLUS LABOR TARGETING TELECOMMUNICATIONS THEORETICAL MODELS TIME SERIES TRANSFER PAYMENTS TRANSITION ECONOMIES UNEMPLOYMENT WAR WEALTH HOUSEHOLD INCOME SOCIAL PROTECTION SYSTEMS REDISTRIBUTION INCOME GROWTH HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME WEALTH
spellingShingle	ADJUSTMENT PROCESS ADVERSE IMPACT AGRICULTURAL PRODUCTION AGRICULTURE AUTOREGRESSION BUSINESS CYCLE CAPITAL ACCUMULATION CHRONIC POVERTY CHRONICALLY POOR COMPARATIVE ECONOMICS CONSUMPTION GROWTH CONSUMPTION INSURANCE CONSUMPTION SMOOTHING COUNTRY REGRESSIONS CREDIT MARKET DATA MODEL DATA SET DEPENDENT VARIABLE DEVELOPMENT ECONOMICS DYNAMIC PANEL ECONOMETRIC MODEL ECONOMETRICS ECONOMIC DYNAMICS ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMIC STUDIES ECONOMIC THEORY ECONOMICS RESEARCH EMPIRICAL WORK EMPLOYMENT EQUILIBRIUM EXPENDITURES FAMINE FINANCIAL CRISES FINANCIAL DEVELOPMENT FINANCIAL POLICIES FORESTRY GROWTH MODELS GROWTH RATE GROWTH THEORIES HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD SURVEYS INCOME INCOME GROUPS INCOME INEQUALITY INCOME REDISTRIBUTION INCOME RISK INCOME SHOCKS INCOMES INCREASING FUNCTION INDEPENDENT MEASUREMENT INDEPENDENT MEASUREMENT ERROR INFLATION INFORMAL INSURANCE INSURANCE LABOR PRODUCTIVITY LAGGED DEPENDENT LAND USE LDCS LINEAR MODEL LIQUIDITY LIVING STANDARDS LONG-RUN EQUILIBRIA LONG-RUN EQUILIBRIUM LOW INCOMES MACROECONOMICS MARKET ECONOMIES MARKET FAILURES MEAN CONSUMPTION MEAN INCOME MEAN INCOMES MEASUREMENT ERROR MONETARY POLICY MONOPOLIES MULTIPLE EQUILIBRIA NEGATIVE SHOCK PERMANENT INCOME POLICY RESEARCH POLICY STRATEGIES POOR POVERTY GAP POVERTY LINE PRODUCTIVITY PUBLIC ECONOMICS RAPID GROWTH RECIPROCITY REDISTRIBUTIVE POLICIES REPEATED SHOCKS SERIAL CORRELATION SERIAL DEPENDENCE SERIES OBSERVATIONS SURPLUS LABOR TARGETING TELECOMMUNICATIONS THEORETICAL MODELS TIME SERIES TRANSFER PAYMENTS TRANSITION ECONOMIES UNEMPLOYMENT WAR WEALTH HOUSEHOLD INCOME SOCIAL PROTECTION SYSTEMS REDISTRIBUTION INCOME GROWTH HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME WEALTH Jalan, Jyotsna Ravallion, Martin Household Income Dynamics in Rural China
geographic_facet	East Asia and Pacific China
relation	Policy Research Working Paper;No. 2706
description	Theoretical work has shown that nonlinear dynamics in household incomes can yield poverty traps and distribution-dependent growth. If this is true, the potential implications for policy are dramatic: effective social protection from transient poverty would be an investment with lasting benefits, and pro-poor redistribution would promote aggregate economic growth. The authors test for nonlinearity in the dynamics of household incomes and expenditures using panel data for 6,000 households over six years in rural southwest China. While they find evidence of nonlinearity in the income and expenditure dynamics, there is no sign of a dynamic poverty trap. The authors argue that existing private and social arrangements in this setting protect vulnerable households from the risk of destitution. However, their findings imply that the speed of recovery from an income shock is appreciably slower for the poor than for others. They also find that current inequality reduces future growth in mean incomes, though the "growth cost" of inequality appears to be small. The maximum contribution of inequality is estimated to be 4-7 percent of mean income and 2 percent of mean consumption.
format	Publications & Research :: Policy Research Working Paper
author	Jalan, Jyotsna Ravallion, Martin
author_facet	Jalan, Jyotsna Ravallion, Martin
author_sort	Jalan, Jyotsna
title	Household Income Dynamics in Rural China
title_short	Household Income Dynamics in Rural China
title_full	Household Income Dynamics in Rural China
title_fullStr	Household Income Dynamics in Rural China
title_full_unstemmed	Household Income Dynamics in Rural China
title_sort	household income dynamics in rural china
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2001/11/1631785/household-income-dynamics-rural-china http://hdl.handle.net/10986/19436
_version_	1764439855227469824

Household Income Dynamics in Rural China

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