Studies of China's inequality almost universally report that the gap between urban and rural household incomes in China is large, has increased over time, and contributes substantially to overall inequality. Whether or not concerns about the urban-rural income gap are justified depends, among other things, on the true magnitude of the gap and also on the factors that underlie the gap. Using a new and rich data, this study investigates the size of China's urban-rural income gap, the contribution of that gap to overall inequality, and the factors underlying the gap in 1995 and 2002. The analysis improves on past estimates by adjusting for spatial price differences and including migrants. It also measures the extent to which the urban-rural income gap is due to differences in household and individual characteristics, rather than the advantages of location of residence. Professor Sicular will present the key findings of this research undertaken with colleagues from the Chinese Academy of Social Sciences, University of Goteburg, and Beijing Normal University.

Terry Sicular received her PhD from Yale University in 1983 and has taught at Harvard University, Stanford University. Her publications include Food Price Policy in Asia: A Comparative Study. Ithaca, NY: Cornell University Press, 1989, What Can We Learn from the Chinese Revolution? Homo Oeconomicus (2004), and Moving toward Markets? Labor Allocation in Rural China Journal of Development Economics (2003). She is currently working on The Political Economy of the Chinese Revolution and Rural Labour and Employment in China (with Yaohui Zhao)

This series is co-sponsored with the Center for East Asian Studies at Stanford University.