45 about 13 percent of the total spending on education in recent decades. The latter consists largely of tuition fees, schoolbooks, transportation, and school uniforms.<sup>91</sup> In the case of health outcomes, China is relatively successful in terms of life expectancy, but less so in terms of infant mortality (UNICEF, 2005). There is, however, general agreement that the uneven distribution of health-care services across geographical areas and population groups is a major social problem.<sup>92</sup> Indeed, the consumption of health care seems to be at least as uneven as the distribution of income. Thus, the increased disparity of income in recent decades has carried over to the distribution of health care. The deficiencies in health care are also a significant source of economic risk for the individual, in particular among those with narrow financial margins. In some cases, a vicious circle of poor health and poor financial resources may therefore have emerged.

The low level of tax-financing of health care is, of course, an important explanation for the uneven distribution of health-care services across population groups. The nongovernment share of total expenditures on health care is reported to have increased from about 16 percent in 1980 to as much as 61 percent in 2001 – a considerable fraction paid in the form of out-of-pocket money by households (Zhang and Kanbur, 2005). The nongovernment share is much larger in the countryside than in cities: 87 percent as compared to 44 percent. Indeed, the number of health personnel in rural areas is reported to have declined by around 12 percent between 1980 and 2001 (UNDP, 2005, p. 58). One reason, in addition to the lack of government-financing, is that many barefoot doctors found it economically rewarding to move to urban areas or shift to other occupations, including agriculture.

> 91 Some families also finance additional education for their children, for instance in the evenings, on weekends and during vacation periods – partly to enhance the competitiveness of their children when applying to institutions for tertiary education. Some relatively affluent farmers also send their children to schools in urban areas.

> 92 Although about 57 percent of the current population live in rural areas today, according to Chow (2006b) only about 20 percent of medical resources have in recent years been allocated to these areas. According to a calculation by Pei (2006, p. 173) rural residents receive only one-third of the health care per person of the urban population.

Only 27 percent of government subsidies to health-care provision are allotted to “township health centers”, even though these centers are supposed to cover 43 percent of the population (World Bank, 2003a). Moreover, while households in urban areas seem to spend 6-7 percent of their income on health care, the corresponding figure for households in rural areas is reported to be 2-3 percent (preliminary estimates by Lindelöw and Wagstaff, 2005). In both areas, however, poor individuals feel compelled to spend a larger share of their income than the non-poor on such services (8-9 percent of their income in urban and 6-7 percent in rural areas.)