Riassunto analitico
Statistical data currently available about China suggest that in the last two decades there has been a steady reduction in income inequality. Several authoritative studies identified the increase of the country's urbanization rate as the main cause of the phenomenon. Nevertheless, the growth in urban drift is not only attributable to the rapid national economic growth, but also and especially to the recent easing of institutional restrictions on internal migration of citizens from rural to urban areas, first of all the infamous and controversial Hukou system. Therefore, this dissertation provides firstly an introductory summary of the Hukou system in force in the People's Republic of China since 1958, analysing the motivations for its introduction and the various stages up to the latest reforms of progressive liberalisation and opening up. Secondly, after this due premise, using data covering all thirty-one Chinese provinces over the period 1999-2018, the main purpose of this thesis is to carry out a comprehensive study on the relationship between urbanization rate (affected by Hukou restrictions) and income inequality measured by the rural-urban Gini coefficient, which estimates the wage gap between residents in urban areas who are holders of non-agricultural hukou registration and the migrant population owning local or non-local agricultural hukou. The empirical analysis is mainly developed at provincial level through a multiple linear regression OLS model and is based on a wider dataset in terms of temporal and geographical coverage. Indeed, it takes into consideration all the Chinese administrative divisions and adds several explanatory and updated control variables, thus integrating some gaps left by previous studies on the subject in terms of completeness and accuracy of the data and, consequently, of the whole outcome. Moreover, despite recent reforms, the current Hukou system still strongly limits internal migration and labour mobility, creating tangible barriers that hinder urban development and access to social inclusion, education, services and welfare provided by local provincial governments. Hence, the thesis strives also to explain how the restrictions on migration, turning into human capital inequality, affect job opportunities and consequently the remuneration perceived by people employed in different sectors. Eventually, the results obtained by the following research support the initial founding hypothesis at its basis: the negative impact of urbanization on income inequality, namely that an increase in urbanization rate leads to a reduction in the rural-urban salary gap.
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Abstract
Statistical data currently available about China suggest that in the last two decades there has been a steady reduction in income inequality. Several authoritative studies identified the increase of the country's urbanization rate as the main cause of the phenomenon. Nevertheless, the growth in urban drift is not only attributable to the rapid national economic growth, but also and especially to the recent easing of institutional restrictions on internal migration of citizens from rural to urban areas, first of all the infamous and controversial Hukou system. Therefore, this dissertation provides firstly an introductory summary of the Hukou system in force in the People's Republic of China since 1958, analysing the motivations for its introduction and the various stages up to the latest reforms of progressive liberalisation and opening up. Secondly, after this due premise, using data covering all thirty-one Chinese provinces over the period 1999-2018, the main purpose of this thesis is to carry out a comprehensive study on the relationship between urbanization rate (affected by Hukou restrictions) and income inequality measured by the rural-urban Gini coefficient, which estimates the wage gap between residents in urban areas who are holders of non-agricultural hukou registration and the migrant population owning local or non-local agricultural hukou. The empirical analysis is mainly developed at provincial level through a multiple linear regression OLS model and is based on a wider dataset in terms of temporal and geographical coverage. Indeed, it takes into consideration all the Chinese administrative divisions and adds several explanatory and updated control variables, thus integrating some gaps left by previous studies on the subject in terms of completeness and accuracy of the data and, consequently, of the whole outcome. Moreover, despite recent reforms, the current Hukou system still strongly limits internal migration and labour mobility, creating tangible barriers that hinder urban development and access to social inclusion, education, services and welfare provided by local provincial governments. Hence, the thesis strives also to explain how the restrictions on migration, turning into human capital inequality, affect job opportunities and consequently the remuneration perceived by people employed in different sectors. Eventually, the results obtained by the following research support the initial founding hypothesis at its basis: the negative impact of urbanization on income inequality, namely that an increase in urbanization rate leads to a reduction in the rural-urban salary gap.
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