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Identity, Inequality, and Happiness: Evidence from Urban China

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  • Jiang, Shiqing
  • Lu, Ming
  • Sato, Hiroshi

Abstract

This paper presents the impact of income inequality on subjective well-being using data from the 2002 Chinese Household Income Project (CHIP) Survey. We find that people feel unhappy with between-group inequality, as measured by the income gap between migrants without local urban hukou (household registration identity) and urban residents, irrespective of whether they are urban residents with or without local hukou. However, when we control for identity-related inequality and other individual, household, and city-level characteristics, inequality (as measured by city-level Gini coefficients) positively correlates with happiness. This study contributes to the inequality–happiness literature by distinguishing between the different effects of between-group and general inequality on happiness.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 40 (2012)
Issue (Month): 6 ()
Pages: 1190-1200

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Handle: RePEc:eee:wdevel:v:40:y:2012:i:6:p:1190-1200

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Web page: http://www.elsevier.com/locate/worlddev

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Keywords: inequality; hukou identity; happiness; migration; Asia; China;

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References

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  1. Clark, Andrew E. & Senik, Claudia, 2009. "Who Compares to Whom? The Anatomy of Income Comparisons in Europe," CEPREMAP Working Papers (Docweb) 0907, CEPREMAP.
  2. Geeta Kingdon & John Knight, 2005. "Community, Comparisons and Subjective Well-being in a Divided Society," Working Papers 05095, University of Cape Town, Development Policy Research Unit.
  3. Bruno S. Frey & Alois Stutzer, 2001. "What Can Economists Learn from Happiness Research?," CESifo Working Paper Series 503, CESifo Group Munich.
  4. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, MIT Press, vol. 120(3), pages 963-1002, August.
  5. John Knight & Lina Song, 2007. "Subjective Well-being and its Determinants in Rural China," Economics Series Working Papers 334, University of Oxford, Department of Economics.
  6. Alberto Alesina & Rafael Di Tella & Robert MacCulloch, 2001. "Inequality and Happiness: Are Europeans and Americans Different?," NBER Working Papers 8198, National Bureau of Economic Research, Inc.
  7. Benhabib, Jess & Rustichini, Aldo, 1996. " Social Conflict and Growth," Journal of Economic Growth, Springer, vol. 1(1), pages 125-42, March.
  8. Appleton, Simon & Song, Lina & Xia, Qingjie, 2005. "Has China crossed the river? The evolution of wage structure in urban China during reform and retrenchment," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 644-663, December.
  9. Knight, John & Deng, Quheng & Li, Shi, 2011. "The puzzle of migrant labour shortage and rural labour surplus in China," China Economic Review, Elsevier, vol. 22(4), pages 585-600.
  10. Shuang Li & Ming Lu & Hiroshi Sato, 2009. "Power as a Driving Force of Inequality in China: How Do Party Membership and Social Networks Affect Pay in Different Ownership Sectors?," CESifo Economic Studies, CESifo, vol. 55(3-4), pages 624-647.
  11. Liu, Zhiqiang, 2005. "Institution and inequality: the hukou system in China," Journal of Comparative Economics, Elsevier, vol. 33(1), pages 133-157, March.
  12. John Knight & Linda Yueh, 2002. "The Role of Social Capital in the Labour Market in China," Economics Series Working Papers 121, University of Oxford, Department of Economics.
  13. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July.
  14. Quheng, Deng & Gustafsson, Björn Anders, 2006. "China's Lesser Known Migrants," IZA Discussion Papers 2152, Institute for the Study of Labor (IZA).
  15. Eli Friedman & Ching Kwan Lee, 2010. "Remaking the World of Chinese Labour: A 30-Year Retrospective," British Journal of Industrial Relations, London School of Economics, vol. 48(3), pages 507-533, 09.
  16. Knight, John & Gunatilaka, Ramani, 2010. "Great Expectations? The Subjective Well-being of Rural-Urban Migrants in China," World Development, Elsevier, vol. 38(1), pages 113-124, January.
  17. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07.
  18. Hirschman, Albert O & Rothschild, Michael, 1973. "The Changing Tolerance for Income Inequality in the Course of Economic Development; with a Mathematical Appendix," The Quarterly Journal of Economics, MIT Press, vol. 87(4), pages 544-66, November.
  19. repec:cup:cbooks:9780521855266 is not listed on IDEAS
  20. Nattavudh Powdthavee, 2009. "How important is rank to individual perception of economic standing? A within-community analysis," Journal of Economic Inequality, Springer, vol. 7(3), pages 225-248, September.
  21. John Knight & Ramani Gunatilaka, 2010. "The Rural-Urban Divide in China: Income but Not Happiness?," Journal of Development Studies, Taylor & Francis Journals, vol. 46(3), pages 506-534.
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Citations

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Cited by:
  1. Andrew E. Clark & Conchita D'Ambrosio, 2014. "Attitudes to Income Inequality: Experimental and Survey Evidence," PSE Working Papers halshs-00967938, HAL.
  2. repec:hal:wpaper:hal-00711212 is not listed on IDEAS
  3. Xavier Fontaine & Katsunori Yamada, 2012. "Economic Comparison and Group Identity: Lessons from India," PSE Working Papers hal-00711212, HAL.
  4. Xavier Fontaine & Katsunori Yamada, 2013. "Caste Comparisons: Evidence from India," ISER Discussion Paper 0867, Institute of Social and Economic Research, Osaka University.

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