This study investigates the impact of COVID-19 and social distancing policies on regional income inequality. We base our study on a sample of 295 prefecture (and above) cities in 31 provinces in China. A distribution dynamics approach is employed to reveal the trend and movement of disposable income per capita in each city before the COVID-19 pandemic, during the COVID-19 pandemic, and in the period when the COVID-19 was under the control. The findings reveal significant negative economic consequences of the COVID-19 in the first quarter of 2020 and show that most cities will converge to a level of disposable income which is much less than the Pre-COVID level if the COVID pandemic persists. Regional income inequality has intensified in the cities that have a longer duration of stringent social distancing policies during the COVID-19 pandemic and disappeared in the cities with policies of short duration. Disposable income per capita for urban residents recovered quickly when the transmission of coronavirus was effectively contained; and yet the impact of the pandemic on rural residents remains unresolved, if not intensified. This study demonstrates a significant divergence of the trend of disposable income across cities with different durations of social distancing policies and between urban and rural residents. It also highlights the importance of stringent social distancing policies in containing the spread of virus in a short time and calls for special policy attention for rural regions in the recovery from the COVID-19.

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This paper studies the returns to general labour market experience and firm-specific tenure, using data from China. Specifically, it focuses on explaining the gender wage difference from the perspective of general human capital and specific human capital. It applies the Heckman maximum likelihood estimator and Topel two-step estimation methodology to correct sample selection bias and individual heterogeneity. After correcting the errors, the authors find that returns to experience are higher for men than women, especially for married men and women. Furthermore, the return to tenure is higher than that to general experience. For men, the former is about 6% higher than the latter. But for women, tenure contributes 7-8% more to the wage growth than experience. The return of general experience mainly contributes to gender wage difference in China. Empirical results also show that the cross section analysis downward biases the returns to potential experience and a simple Topel-2S estimation in the panel study upward biases the returns.