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In the United States, there is little difference in annual income inequality and income mobility between the rural and urban sectors of the economy. This forms a sharp contrast with China where income inequality is greater and income mobility lower among rural households than among urban households. When incomes are averaged over three years and when adjustments are made for the size and composition of households, income inequality among all households differs little between China and the United States in the 1990s. Moreover when pooling rural households and urban households and when measuring annual income inequality and income mobility of the pooled households, the mobility of incomes of households in the United States differs little from that in China. Social welfare functions are posited that allow for a trade-off between increases in income and increases in income inequality. These suggest strong increases in well-being for urban households in China. The corresponding changes in rural China and in the United States are smaller. Four sets of data on households are drawn on to document these findings.

Fast growth in China has led to significant improvement in people's living standards and average income. However, it has also brought about a huge rise in inequality. The purpose of this paper is to analyse regional and rural‐urban inequality using a few income and consumption indicators.

Data are collected from official statistical sources for all the Chinese provinces over 1978‐1995. Both parametric and non‐parametric methods are used to study the inequality between regions and between the rural and urban sub‐populations. The parametric approach is to test whether per capita incomes among provinces converged over time. The non‐parametric approach is the calculation and decomposition of the Gini coefficient by population sub‐group and income source.

The results show no evidence of growth convergence in per capita GDP, income and expenditure across provinces, but clear evidence of divergence in per capita rural (and urban) incomes and total expenditures. Three‐quarters of inter‐provincial income inequality are explained by inter‐rural/urban inequality. Inter‐provincial inequality explains more than half of rural inequality and less than half of urban inequality in most years.

This paper uses one of the most complicated datasets for the Chinese regions. It studies inequality using different economic indicators. It considers the different dimensions of inequality in China using two different approaches. The results are important for regional development policies.

This paper examines the impact of residents’ human capital investment inequality on the urban–rural income gap, using China’s provincial panel data from 1997 to 2013. The results show that, at the national level as well as at the regional level, residents’ overall human capital investment inequality has a positive significant impact on the urban–rural income gap. In addition, the impact of overall human capital investment inequality increased monotonically from the eastern region inward to the western region. In terms of the relative impact of each component of human capital investment inequality on the urban–rural income gap, migration investment inequality appears to have the greatest impact at the national level, whereas health investment inequality has the greatest impact on the urban–rural income gap in the eastern region, and education investment inequality exhibits the greatest impact in the central and western regions. We also investigate the impact of human capital investment inequality on the urban–rural income gap over different periods. The results show that residents’ overall human capital investment inequality had a positive impact on the urban–rural income gap in the period 1997–2008, but the impact rapidly shrunk in 2009–2013. Furthermore, the impact of residents’ health investment inequality on the urban–rural income gap shows a downward trend, and the impact of residents’ education investment inequality trended slightly upward from 1997 to 2008, and then rapidly shrunk in 2009–2013. Finally, the impact of residents’ migration investment inequality was only significant in 1997–2002.

Since 1978, China has made tremendous economic achievements through industrial upgrading. However, these achievements are accompanied by an expanding income gap between rural and urban areas. The purpose of this paper is to examine the relationship between industrial structure and urban–rural income inequality in China.

Using the fixed-effects model and provincial data for the period 1985–2019, this paper estimates a linear relationship between industrial structure and urban–rural income inequality. By decomposing total income inequality into four components, the paper then analyzes how industrial structure affects each component.

The results show that industrial structure imbalance and industrial upgrading are positively associated with urban–rural income inequality. The positive effect of industrial imbalance mainly comes from widening the wage gap, while that of industrial upgrading mainly comes from aggravating business income inequality and property income inequality. Moreover, industrial balance and upgrading are conducive to increasing the share of wage income at the cost of property income.

By progressively examining the total inequality and the inequality of income components, this paper provides a better understanding of how industrial structure affects urban and rural income inequality. The findings of this study highlight the “inequality cost” associated with industrial structure adjustment, which provide policy-related insights on the balance development of urban and rural areas.

The purpose of this paper is to analyse the impact of foreign direct investment (FDI) on urban-rural income inequality in China.

This study uses the provincial-level panel data and employs the fixed-effects instrumental variable regression technique to investigate empirically the impact of FDI on urban-rural income inequality in China.

The study finds that while FDI has directly contributed to reducing urban-rural income inequality through employment creation, knowledge spillovers and contribution to economic growth, FDI has also contributed to increasing urban-rural income inequality through international trade.

The study has some policy implications. First, as the study finds that FDI not only contributes to reducing urban-rural income inequality through employment creation, knowledge spillovers and contribution to economic growth, but also contributes to increasing urban-rural income inequality through international trade, therefore, apart from improving local economic and technological conditions to attract more FDI inflows, China should re-design FDI policies by shifting away from encouraging export-oriented FDI to encouraging FDI flows into the industries and sectors in line with China’s overall economic structural adjustments and industrial upgrading. Second, policies should focus on increasing investment in infrastructure development and in public education, which not only can reduce urban-rural income inequality but also can attract more FDI inflows. And finally policies should be designed to accelerate urbanisation development by focusing on urban-rural integrated development, household registration system reform and proper settlement of rural migrants in urban areas, thus reducing urban-rural income inequality.

The paper makes two major contributions to the literature. First, the paper adopts the fixed-effects instrumental variable regression technique to deal with the endogeneity issues in estimating the impact of FDI on urban-rural income inequality, producing more consistent estimates. Second, the paper investigates not only the direct impact of FDI on urban-rural income inequality through the effects of employment creation, knowledge spillovers and contribution to economic growth, but also the indirect impact of FDI on urban-rural income inequality through its activities in international trade, adding new empirical evidence to the sparse literature on the impact of FDI on income inequality in China.

The purpose of this paper is to investigate the impact of financial development on the rural‐urban income inequality in India using annual data from 1965 to 2008.

The Ng‐Perron unit root test is utilised to check for the order of integration of the variables. The long run relation is examined by implementing the ARDL bounds testing approach to cointegration.

The results confirm a relation among the variables. Evidence suggest that financial development, economic growth and consumer prices aggravate rural‐urban income inequality in the long run.

The present study offers fresh insights to policy makers on crafting appropriate policies that reduce rural‐urban income inequality in India.

The contribution of this paper is lies in extending the literature in the context of India towards an extensively researched area of rural‐urban divide but in time series framework and utilization of a better approach of time series approach, i.e. ARDL. Specifically, to the best of the authors' knowledge, this is the first empirical study to test poverty‐finance nexus using the basic principles of the GJ hypothesis and provide evidence of short‐ and long‐run dynamics on the postulated relation for India.

The purpose of this paper is to examine the relationship between financial development and rural-urban income inequality (INQ) in South Asian Association for Regional Cooperation (SAARC) countries using panel data from 1986-2012.

The stationarity properties are checked by the LLC and IPS panel unit root tests. The paper applied the Pedroni’s panel co-integration test to examine the existence of the long-run relationship and coefficients of co-integration are examined by fully modified ordinary least squares. The short-term and long-run causality is examined by panel Granger causality.

The results of Pedroni co-integration test indicate that there exists a long-run relationship among the variables. The findings suggest that financial development increases rural-urban inequality whereas trade openness reduces rural-urban inequality. The empirical results of panel Granger causality indicate evidence of short-run causality confirms that economic growth and financial development causes rural-urban INQ.

The present study recommends for appropriate economic and financial reforms focusing on financial inclusion to reduce rural-urban INQ in SAARC countries. Financial policies geared toward agriculture and rural population should be adopted to reduce the prevailing rural-urban INQ in SAARC region.

Till date, there is hardly any study exploring the causal relationship between financial development and rural-urban INQ for SAARC countries by using panel co-integration and causality techniques. So the contribution of the paper is to fill these research gaps in the literature.

This chapter examines the trend in school enrollment and transitions to senior high school and to college in China for selected young cohorts since the 1990s, based on the analyses of the sample data from population censuses in 1990 and 2000 and the mini-census in 2005. We pay particular attention to educational inequality based on gender and the household registration system (hukou) in the context of educational expansion. Results show a substantial increase in educational opportunities over time at all levels. In particular, women have gained relatively more; gender inequality has decreased over time, and the gap in college enrollments was even reversed to favor women in 2005. However, rural–urban inequality was enlarged in the 1990s. The educational expansion has mainly benefited females and urban residents.

To explore income inequality in urban China, this paper investigates disparities between- and within-urban locals and rural migrants from 2002 to 2013, using three waves of the China Household Income Project (CHIP) data. While the existing literature concentrates on the wage disparity between these two groups, our results show that the Gini among the migrants increased by 17.86% between 2007 and 2013 and that among the locals increased by 15.54% from 2002 to 2007. The urban–migrant average income gap decreased during the whole period mainly due to higher growth in migrants’ average income. Estimates based on Mincerian earnings functions for both groups reveal the significant role of the education, occupation and type of contract in determining the within-group inequality. In addition, using a recentred influence function (RIF), we observe that short-term and other types of contracts, duration of the job, in-system ownership, marriage and skill have inequality-enhancing effects for migrants. The variation of skills has a larger impact on the income disparity among migrants than on that among urban locals. The RIF-based Blinder–Oaxaca decomposition of the mean difference of incomes shows that labour market discrimination between the two groups is not significant; however, both pure explained and unexplained differences are significant when applying the RIF decomposition to the variance of the logarithms of incomes. While the type of contract significantly reduces the pure explained difference between migrants and urban locals, occupation has a positive impact on this difference between these two groups. The heterogenity analysis shows that the factors influencing incomes in these two groups are different. We recommend labour market intervention to reduce unreasonable occupational and sectoral disparities, especially in the net inflow provinces, to mitigate urban inequality in China effectively.

The purpose of this paper is to investigate the relationship between infrastructure development, rural–urban income inequality and poverty for BRICS economies.

Pedroni’s panel co-integration test and panel dynamic ordinary least squares (PDOLS) have been used to carry out the analysis.

The empirical findings confirm a long-run relationship among infrastructure development, poverty and rural–urban inequality. The PDOLS results suggest that both infrastructure development and economic growth lead to poverty reduction in BRICS. However, rural–urban income inequality aggravates poverty in these nations. The paper advocates for adopting policies aimed at strengthening infrastructure and achieving economic growth to reduce the current levels of poverty prevailing in the BRICS nations.

Significant limitations exist in the literature in terms of not clearly defining the nature of relationship and interlinkages between infrastructure development, poverty and inequality, with regard to the BRICS nations. The available studies mainly focus on the relationship between infrastructure and growth, with the universal agreement being that these two are positively related. However, it is still not right to assume that economic growth attributable to infrastructure development will, therefore, subsequently lead to a reduction in inequality. This forms the basis for this study, that is, to critically examine the relationship between infrastructure development, inequality and poverty for BRICS nations.