Poverty concentration and determinants in low-income neighbourhoods and social groups in Chinese large cities

Abstract

Based on a large-scale household survey conducted in 2007, this paper reports on a study into poverty concentration and determinants in China's low-income neighbourhoods and social groups. Three types of low-income neighbourhood are recognized: dilapidated inner city neighbourhoods, declining workers' villages, and urban villages. Respondents are grouped into four categories: working urban residents, laid-off/unemployed urban residents, retired urban residents, and rural migrants. Firstly, this study applies the FGT (Foster, Greer, Thorbeck) index to measure poverty concentration across different types of neighbourhood and different groups. The highest poverty concentration is found in dilapidated inner city neighbourhoods and the laid-off7unemployed group which endure multiple disadvantages. Meanwhile, mismatches between actual hardships, sense of deprivation, and distribution of social welfare provision are found. Second, we ran logistic regression models to analyze the association between poverty generation and various explanatory variables, and thus examine poverty determinants in different neighbourhoods and groups. Variations in institutional protection and market remuneration are becoming equally important in predicting poverty generation, and these are differently associated with poverty generation in different kinds of neighbourhoods and groups. As China's urban economy is increasingly shaped by markets, the mechanism of market remuneration is becoming a more important determinant of poverty patterns, especially for people who are eliminated or excluded from state institutions, notably, laid-off workers and rural migrants.