Urbanization and Earning Inequality: A Dynamic Analysis
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| Title | Urbanization and Earning Inequality: A Dynamic Analysis
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| Author | Gao Hongying and Wu Kangping |
| Organization | School of Economics and Management, Tsinghua University |
| Email | gaohy@sem.tsinghua.edu.cn,wukp@sem.tsinghua.edu.cn |
| Key Words | Urbanization; Earning Inequality; Dynamic Equilibrium; Path Choice |
| Abstract | Urbanization is a process in which variations of many factors are involved. These factors make different effects on the evolution of earning inequality, so it is essential to decompose and analyze these effects. This paper makes?a?selection?of?inequality?indexes, and applies the dynamic decomposability of the earning inequality formula to present a simple model of earning inequality during the course of urbanization. This framework can be used to analyze (ⅰ) the quantifiable relationship between the growth rate of urban formal sectors and that of earning inequality, (ⅱ) the inverted U path of earning inequality with the enlargement of urban formal sectors, and (ⅲ) the impact of other factors on the earning inequality. Further, we point out that there are multiple dynamic equilibria between the urbanization process and the evolution of earning inequality. Finally, we put forward fundamental principles in the path choice of urbanization, which put the constraint of earning inequality and contractual changes of urbanization into consideration. |
| Serial Number | WP612 |
| Time | 2014-08-05 |
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