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Reconciling the Conflicting Narratives on Poverty in China

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Abstract

The widely held view that China has greatly reduced income poverty over the last 40 years does not accord with all the evidence. The paper tries to reconcile the conflicting findings. The fact that strongly-relative measures show rising poverty is easily understood, since such measures depend solely on relative distribution, and inequality in China has been rising until recently. More surprising, and revealing, is the story told by the official lines, which were revised twice since the original 1985 line. The paper shows that the official lines are neither absolute nor strongly relative. Rather, they are weakly relative, with a positive elasticity to the mean that is less than unity. Along with rising inequality, this feature slowed the pace of measured poverty reduction when compared to absolute measures. Nonetheless, substantial progress against poverty is indicated, as we confirm using our independent, and higher, weakly-relative lines calibrated to cross-country data. Classification- I32, O15

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  • Martin Ravallion & Shaohua Chen, 2021. "Reconciling the Conflicting Narratives on Poverty in China," Working Papers gueconwpa~21-21-09, Georgetown University, Department of Economics.
    • Handle: RePEc:geo:guwopa:gueconwpa~21-21-09
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    Cited by:

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    2. Ravallion, Martin & Chen, Shaohua, 2022. "Fleshing out the olive? Observations on income polarization in China since 1981," China Economic Review, Elsevier, vol. 76(C).
    3. Lugo, Maria Ana & Niu, Chiyu & Yemtsov, Ruslan, 2021. "Rural Poverty Reduction and Economic Transformation in China: A Decomposition Approach," SocArXiv 8rbgw, Center for Open Science.
    4. Shubin Wang & Qiang Li & Yan Gu, 2023. "Local officials' political capital and poverty alleviation," International Studies of Economics, John Wiley & Sons, vol. 18(3), pages 351-369, September.
    5. Andrea Brandolini & John Micklewright, 2023. "Measuring global poverty," Chapters, in: Jacques Silber (ed.), Research Handbook on Measuring Poverty and Deprivation, chapter 6, pages 60-69, Edward Elgar Publishing.
    6. Gustafsson, Björn Anders & Sai, Ding, 2023. "China's Urban Poor – Comparing Twice Poverty between Residents and Migrants in 2013 and 2018," IZA Discussion Papers 16255, Institute of Labor Economics (IZA).
    7. Zengzeng Fan & Wei Zou, 2023. "A Three-Component Decomposition of the Change in Relative Poverty: An Application to China," Land, MDPI, vol. 12(1), pages 1-15, January.
    8. Martin Ravallion & Shaohua Chen, 2022. "Is that really a Kuznets curve? Turning points for income inequality in China," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(4), pages 749-776, December.
    9. Hong Sun & Xiaohong Li & Wenjing Li & Jun Feng, 2022. "Differences and Influencing Factors of Relative Poverty of Urban and Rural Residents in China Based on the Survey of 31 Provinces and Cities," IJERPH, MDPI, vol. 19(15), pages 1-15, July.
    10. Gong, Jinquan & Wang, Gewei & Wang, Yafeng & Zhao, Yaohui, 2022. "Consumption and poverty of older Chinese: 2011–2020," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    11. Li, Bo & Lu, Shilin, 2023. "Labor education, cash transfers and student development: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 87(C).
    12. Han, Linsong & Li, Xun & Xu, Gang, 2022. "Anti-corruption and poverty alleviation: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 150-172.

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    More about this item

    Keywords

    China; poverty lines; relative income;
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    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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