The “difference between heaven and earth”: Urban–rural disparities in well-being in China

Although China is a rapidly developing nation, rural–urban disparities in well-being remain large, and perhaps have become larger than in the early years of the Communist period because the urban sector has benefited from China's transition to a market economy much more than has the rural sector; or perhaps have become smaller as earning opportunities in the export-oriented manufacturing sector have increased for those from rural origins. Economic disparities are exacerbated by institutional arrangements that have created a two-class society based on registration (hukou) status with sharp rural–urban distinctions in the public provision of schooling, health care, housing, and retirement benefits. Indeed, it is fair to say that China built an urban welfare state on the backs of the peasants.Using data from two national probability sample surveys, one carried out in 1996 and one in 2008, this paper describes trends in various aspects of inequality for three groups, identified at age 14: those with rural registration and rural residence; those with rural registration and urban residence; and those with urban registration. The specific outcomes considered are education, occupational position, earnings, family income, material well-being, and perceptions regarding whether life has improved. The paper shows that a rising tide lifts all boats. That is, there has been across-the-board improvement in almost all aspects of life in China measured here, but for most measures the size of the rural–urban gap has remained relatively constant over a 60-year period.