These results suggest that rising inequalities in the four countries have different
driving forces. Urbanization played a major role in driving up national inequality
in Indonesia and the Philippines, mainly because of a large increase in the share of
the urban population during the past two decades, higher urban inequality relative
to rural inequality, and the fact that the two countries have not passed the turning
point, as illustrated in Kuznets’ numerical examples (see further discussion in the
next section). Urbanization has also contributed to rising inequality in India, but it
is not a major driver because the increase in the share of India’s urban population
in the past two decades has been rather modest. For the PRC, urbanization has
actually helped reduce national inequality despite the large increase in the share
of urban population. This is partly due to its lower urban inequality relative to
rural inequality.