Great Famine, Differential Fertility, and Income Inequality: Evidence from China

2018-09-13

TopicGreat Famine, Differential Fertility, and Income Inequality: Evidence from China

Speaker:Assistant Professor Xuebo Wang, The School of Economics, Shanghai University of Finance and Economics

Time:10:00-11:30am   Monday, September 17,2018    

Site:EMS B247

Abstract:Existing literature theoretically proves that differential fertility across income classes can affect the steady state income inequality. This study provides the first piece of empirical evidence on the causality between differential fertility across heterogeneous families and the income inequality of the next generation. Given that Chinas Great Famine (1959–1961) mainly attacked rural areas, we show that it can be considered as an exogenous shock to the countrys fertility structure and has a long-term effect on the rural–urban population composition. We use the severity of the Famine to instrument for the rural share of the population who are born after the Famine. We find that at the provincial and prefectural levels, a higher rural share of the population induces a higher Gini coefficient for the post-Famine cohorts several decades later. We further analyze the mechanisms through which the rural–urban population composition affects income inequality. We determine that a higher rural share of the population induces a lower probability of rural youths being admitted to colleges. That is, as a larger proportion of new population concentrate in rural areas, it would become more difficult for these rural children to get access to college education and get out of poverty, and social mobility also decreases accordingly.

Introduction to the Speaker:Xuebo Wang is an assistant professor of economics at the School of Economics, Shanghai University of Finance and Economics. He received his PhD from the Chinese University of Hong Kong in 2018. His primary research field is applied microeconomics, including labor economics, development economics, and economic history. He has published a paper in the Journal of Development Economics.