Rural-Urban Economic Disparities among China’s Elderly

that the question on the urban questionnaire refers to monthly income whereas in the rural
questionnaire refers to (last) yearly income.

Table 6: Average income level

Urban incomes are much higher than rural incomes, as expected. China’s dualistic
approach to development (despite recent attempts to reduce the regional disparities) has
resulted in an enduring urban/rural income gap. Urban residents, including elderly, not
only enjoy higher incomes but also greater benefits (such as housing and health).⁸
Segregated labor markets and occupations, and government policy contribute to these
differences. As a result, rural households’ income and benefits fall significantly short of
their urban counterparts.

4.1. Income distribution

The household income distribution within sectors is depicted in the two figures below.
One third of rural households report zero or very low income (7.4 percent report zero and
26 percent report between 1 and 1000 renminbi yuan); 41.7 percent report an yearly
income between 1001 and 3,000; and 24.6 percent have incomes of 3,000 yuan or higher.

A casual observation suggests that the income distribution within urban households
is more equitable (figure 2). Only 1.7 percent of the urban households report an income of
zero, and only 23.5 percent report a relatively low income of between 1 and 200 yuan per
month; 38.6 percent have incomes between 201 and 400; and 36.2 percent report relatively
high incomes of more than 400 yuan.

⁷ Own calculations.

⁸ State-subsidized benefits distinguish China from other modern societies. In addition to “the indirect
subsidies through urban infrastructure mostly enjoyed by urban residents, urban employees also receive
welfare benefits associated with their employment (Wang and Zuo, 1999).

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