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2021-06-01
Department of Building and Real Estate, Hong Kong Polytechnic University, Kowloon, Hong Kong.; Department of Economics and Finance, Hang Seng University of Hong Kong, Hong Kong, China.; Department of Economics and Finance, Hang Seng University of Hong Kong, Hong Kong, China.; School of Economics and Trade, Hunan University, Changsha, China.
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