Foreign Direct Investment and China¡¯s Regional Income Inequality

This article uses multivariate regression and decomposition analyses to assess household income mobility determinants and their contributions to income mobility in rural China from 1989 to 2006 using panel data from the China Health and Nutrition Survey (CHNS) database. The findings indicate that households with low initial income level, high share of wage income, high educational level of household members, high number of non-agricultural employed household members, and younger heads are more mobile. Moreover, besides initial income, change in the share of wage income, change in the share of non-agricultural employed household members, and change in average year of education of household members are the most important factors that account for income mobility. These findings necessitate more emphasis on policies that promote non-agricultural employment and education to enhance household income mobility in rural China.