Abstract: No AccessPolicy Research Working Papers25 Jun 2013Household Income Dynamics in Rural ChinaAuthors/Editors: Martin Ravallion, Jyotsna JalanMartin Ravallion, Jyotsna Jalanhttps://doi.org/10.1596/1813-9450-2706SectionsAboutPDF (0.1 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract:Is effective social protection an investment with long-term benefits? Does inequality impede growth? Household panel data on incomes in rural China offer some answers. 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. Jalan and Ravallion 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. This paper—a product of the Poverty Team, Development Research Group—is part of a larger effort in the group to better understand the dynamic processes influencing household welfare in risk-prone environments. The authors may be contacted at [email protected] or [email protected] Previous bookNext book FiguresReferencesRecommendedDetailsCited ByEconomic Growth and Rural Poverty in Pakistan: A Panel Dataset AnalysisThe European Journal of Development Research, Vol.32, No.419 February 2020Financial efficiency versus social outreach of Indian microfinance institutions: mission drift or character shift?Journal of Social and Economic Development, Vol.19, No.228 June 2018Subjective Expectations and Income Processes in Rural IndiaEconomica, Vol.83, No.3318 April 2016Assessing the Impact of Infrastructure on Economic Growth and Global CompetitivenessProcedia Economics and Finance, Vol.23The Poorest: Who and Where They Are?14 July 2013Child malnutrition and mortality in China and Vietnam in a comparative perspectiveEconomic Change and Restructuring, Vol.41, No.118 March 2008 View Published: November 2001 Copyright & Permissions Related RegionsEast Asia & PacificRelated CountriesChinaRelated TopicsFinance and Financial Sector DevelopmentHealth Nutrition and PopulationMacroeconomics and Economic GrowthPoverty ReductionPrivate Sector DevelopmentRural DevelopmentSocial Protections and Labor KeywordsAGRICULTURAL PRODUCTIONANTI-POVERTYCONSUMPTION INSURANCEHOUSEHOLD INCOMEHOUSEHOLD SURVEYHOUSEHOLD SURVEYSINCOME DYNAMICSINEQUALITYINSURANCEMARKET FAILURESPOORPOVERTYPOVERTY POLICIESREDISTRIBUTIVE POLICIESREPEATED SHOCKSRISKSRURALRURAL DEVELOPMENTRURAL HOUSEHOLDRURAL INCOMES PDF DownloadLoading ...