ABSTRACT
This chapter purposes the three stylized facts and using data for four Asian countries: the PRC, India, Indonesia, and the Philippines, looks at how the changing dual economic structure in Asia and particularly urbanization have impacted the evolution of national inequality in the past and how the former might impact the latter in the future. It estimates how much of the observed changes in inequality in the four Asian countries over the past two decades can be attributed to changes in the four components or drivers. The chapter provides a more in-depth analysis of the relationship between urbanization and national inequality. It also estimates the impact of a marginal change in each of the four components on national inequality. The widening urban-rural income gap was a major contributor to rising national inequality in both India and the PRC. The caveat is that prioritizing policy actions also needs to take into account any associated costs.
