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Economic Restructuring and Income Inequality in Urban China

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Xin Meng

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Abstract

Economic transition from a planned to a market oriented economy is often associated with a widening of income inequality. The nature of this change, however, may differ during different stages of the economic transition. This paper investigates the increase in income inequality in urban China during two phases of economic reform: a moderate reform era (1988-95) and a radical reform era (1995-99). It is found that although income inequality increased considerably during both stages, the nature and causes of the increase are different. In the moderate reform period, the increase in inequality was a result of some parts of society sharing more of the economic gain than others, and the main cause of this inequality is regional income dispersion. During the radical reform period income reductions at the lower end of the distribution is observed, and it is mainly due to the large-scale unemployment generated by labor reallocation. Copyright 2004 Blackwell Publishing Ltd.

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File URL: http://www.blackwell-synergy.com/links/doi/10.1111/j.0034-6586.2004.00130.x/enhancedabs
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Publisher Info
Article provided by Blackwell Publishing in its journal Review of Income and Wealth.

Volume (Year): 50 (2004)
Issue (Month): 3 (09)
Pages: 357-379
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Handle: RePEc:bla:revinw:v:50:y:2004:i:3:p:357-379

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  1. Bingqin Li & David Piachaud, 2004. "Poverty and Inequality and Social Policy in China," CASE Papers 087, Centre for Analysis of Social Exclusion, LSE. [Downloadable!]
  2. Amy Y.C. Liu, 2005. "Changing wage structure and education in Vietnam 1993-1998 - The roles of demand," Development Economics Working Papers 596, East Asian Bureau of Economic Research. [Downloadable!]
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  3. Wu, Ximing & Perloff, Jeffrey M., 2004. "China'S Income Distribution Over Time: Reasons For Rising Inequality," 2004 Annual meeting, August 1-4, Denver, CO 20061, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
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  4. Chotikapanich, Duangkamon & Prasada Rao, D.S. & Tang, KamKi, 2006. "Estimating Income Inequality in China Using Grouped Data and the Generalized Beta Distribution," Working Papers RP2006/134, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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  5. Dwayne Benjamin & Loren Brandt & John Giles & Sangui Wang, 2005. "Income Inequality During China's Economic Transition," Working Papers tecipa-238, University of Toronto, Department of Economics. [Downloadable!]
  6. Xin Meng, 2007. "Wealth Accumulation and Distribution in Urban China," IZA Discussion Papers 2553, Institute for the Study of Labor (IZA). [Downloadable!]
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  7. Pedro H. Albuquerque, 2005. "Inequality-Driven Growth: Unveiling Aggregation Effects in Growth Equations," Development and Comp Systems 0511028, EconWPA. [Downloadable!]
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  8. Niny Khor & John Pencavel, 2006. "Income Mobility of Individuals in China and the United States," IZA Discussion Papers 2003, Institute for the Study of Labor (IZA). [Downloadable!]
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  9. Margaret Maurer-Fazio & Ngan Dinh, 2002. "Differential Rewards to, and Contributions of, Education in Urban China’s Segmented Labor Markets," William Davidson Institute Working Papers Series 508, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  10. Chris SAKELLARIOU, 2009. "This paper investigates the developments in wage inequality in Indonesia over two time periods, 1994 to 2001 and 2001 to 2007. Wage changes are decomposed at the mean as well along the wage distributi," Economic Growth centre Working Paper Series 0906, Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre. [Downloadable!]
  11. Stefan Gravemeyer & Thomas Gries & Jinjun Xue, 2008. "Discrimination, Income Determination and Inequality – The case of Shenzhen," Working Papers 16, University of Paderborn, CIE Center for International Economics. [Downloadable!]
  12. Junichi Ito, 2008. "The removal of institutional impediments to migration and its impact on employment, production and income distribution in China," Economic Change and Restructuring, Springer, vol. 41(3), pages 239-265, September. [Downloadable!] (restricted)
  13. Gao, Qin, 2006. "Social Benefits in Urban China: Determinants and Impact on Income Inequality in 1988 and 2002," Working Papers RP2006/117, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  14. Meng, Xin & Gregory, Robert & Wan, Guanghua, 2006. "China Urban Poverty and its Contributing Factors, 1986-2000," Working Papers RP2006/133, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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