Impacts of Two Tax Reforms on Inequality and Welfare in China

Shen, Yangyang; Li, Shi; Wang, Xiaobing

doi:10.1111/cwe.12377

Cited by 14 publications

(10 citation statements)

References 32 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The national average burden of agricultural taxes and fees for rural household was approximately 20% of the value of the yield in a normal year. Even when rural labourers migrated to urban areas, they still faced rural tax and fee liabilities simply because of their rural hukou status (Shen et al, 2021; Wang & Piesse, 2010). This situation was exacerbated by huge discrimination in terms of occupational attainment and wages for migrant workers.…”

Section: China's Hukou System and Urban Biasmentioning

confidence: 99%

“…As discussed above, the rural urban divide of the hukou system may have contributed to China's growth by ensuring a relatively orderly and smooth urbanization, but it has also reduced rural households' welfare by impeding their migration, and this has led to possible relative welfare losses for rural residents. There have been some improvements since the early 2000s, and the boundary between a county‐level urban hukou and rural hukou has been blurring because the difference in terms of treatment between rural hukou and urban hukou in small cities became smaller with the reduction in subsidies for urban hukou holders and the removal of the agriculture tax in 2006 (Shen et al, 2021). Since the mid‐2010s, some provinces have started further reforming the hukou system, where the rural and urban hukou division is no longer distinguished and people can choose their place of registration within a province.…”

Section: Migration Across Citiesmentioning

confidence: 99%

“…Lin et al (2001) present a theoretical discussion of this strategy. See Wang and Piesse (2010) and Shen et al (2021) for empirical evidence on the higher tax rate in rural areas. ate migration costs that can affect rural-urban migration.…”

Section: Orcidmentioning

confidence: 99%

See 2 more Smart Citations

China's efficient urban bias

Rangazas

Wang

Zou

2022

Pacific Economic Review

Self Cite

View full text Add to dashboard Cite

This paper develops a dynamic general equilibrium model with endogenous rural–urban migration to analyse the provision of rural and urban government services in China, with special emphasis on the role of the household registration (hukou) system in shaping its urbanization process. It argues that China's urban bias policy, which is enabled by the hukou system restricting rural–urban migration, did not necessarily reduce economic efficiency. Rather, it might have only raised urban welfare at the expense of rural residents. As the hukou system also ties people to particular geographical locations, this paper argues that China's continuous bias towards coastal and big cities has started to cause economic inefficiency as well as inequality. It suggests that progressive hukou reform reducing barriers to cross‐region migration would improve economic efficiency and welfare.

show abstract

Section: China's Hukou System and Urban Biasmentioning

confidence: 99%

Section: Migration Across Citiesmentioning

confidence: 99%

See 1 more Smart Citation

China's efficient urban bias

Rangazas

Wang

Zou

2022

Pacific Economic Review

Self Cite

View full text Add to dashboard Cite

show abstract

“…However, because it exempts many low-income groups from income tax and the marginal value of income of the poor is much higher, the overall social welfare has increased. The researchers predict that the tax reform implemented in early 2019 (introduced in 2018) will further reduce the tax burden on middle-income people (Shen et al, 2021).…”

Section: Literature Reviewmentioning

confidence: 99%

Convergence or Divergence: Preferences for Establishing an Unemployment Subsidy During the COVID-19 Period by Taxing Across Earnings Redistribution in Urban China

Zhou

et al. 2022

Front. Psychol.

View full text Add to dashboard Cite

With the advancement of marketization, China has achieved rapid economic growth and economic class differentiation. This research analyzes the data from China’s livelihood survey, divides the urban Chinese into five socio-economic classes, and tests their preferences and tendencies for income redistribution. It obtains the general attitude differences in subsidy policy and income inequality during COVID-19. Our conclusion are consistent with the existing literature to a great extent; that is, personal factors (self-interest and belief in fairness) play a crucial role in the attitude of Chinese citizens. In the analysis of situational factors, the results show that the higher the level of marketization, the people are more likely to have stronger negative emotions about subsidy or redistribution policies. Further analysis shows that people with the lowest income are susceptible to the fact that income inequality has become significant and show a strong willingness to support the government’s redistribution policy. In contrast, middle-class people tend to favor the government’s redistribution policy, although they will not benefit much from the redistribution policy. Therefore, they lack the motivation to support the government in vigorously implementing the subsidy policy. Significantly, high-income people are indifferent, as they lack such motivation even more. The difference in redistribution preferences between upper-class and lower-class groups signals polarization in Chinese society, especially income redistribution.

show abstract

“…Of course, a migrant worker would normally have relative high income so that they will not qualify. SeeWang and Piesse (2010),Shen et al (2021) for a discussion rural urban divide due to taxation and subsidies, andRangazas and Wang (2019),Rangazas et al (2022) for a discussion of rural urban migration and China's urban biased policy).…”

mentioning

confidence: 99%

When Poverty Reduction Meets Democracy: An Investigation into the Use of Different Evaluation Methods for Assessing the Effectiveness of a Social Program

Zhan

Shi

Shen

et al. 2022

Asian Economic Papers

Self Cite

View full text Add to dashboard Cite

This paper evaluates the minimum living standard guarantee program (Dibao) in rural China using several methods including the income approach, the multidimensional poverty approach, and a proxy means test approach. We find that the targeting accuracy of the program appears greater the more comprehensive the evaluation method used—but all these methods find low levels of targeting accuracy. Because Dibao fund allocation is largely decided by the villagers, who take a more holistic view in selecting “poor” households than the various evaluation methods, we argue that the low targeting effective may be due to the lack of comprehensive evaluation method, as opposed to the low targeting of the program itself. This paper argues that the community-based targeting used by the Dibao program may be a better way to combat poverty in many developing countries, as it requires less administrative capacity and overcomes the difficulties of identifying poor households that qualify for assistance.

show abstract

Impacts of Two Tax Reforms on Inequality and Welfare in China

Cited by 14 publications

References 32 publications

China's efficient urban bias

China's efficient urban bias

Convergence or Divergence: Preferences for Establishing an Unemployment Subsidy During the COVID-19 Period by Taxing Across Earnings Redistribution in Urban China

When Poverty Reduction Meets Democracy: An Investigation into the Use of Different Evaluation Methods for Assessing the Effectiveness of a Social Program

Contact Info

Product

Resources

About