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Report of China Household Income Disparity

Author

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  • Survey and Research Center for China Household Finance, SWUFE

    (Survey and Research Center for China Household Finance, Southwestern University of Finance and Economics (SWUFE), Chengdu 610074, China)

Abstract

Based on China Household Finance Survey (CHFS) data, China¡¯s Gini Coefficient stood at 0.61 in 2010, above the global average of 0.44, according to the World Bank. The high Gini Coefficient represents a large income disparity of the country. It is understandable that a high Gini is common in fast-growing economies and can be reduced through government¡¯s transfer payments given the experience of OECD countries. This paper illustrates the breakdown of China¡¯s Gini, regional, rural and urban differences in household income. Specifically, it is found that poor health, insufficient social welfare and low education level are the main reasons for poverty of rural households. This paper also provides solutions to reduce the Gini coefficient. In the short term, China government can invest more on social insurance and implement large-scale transfer payments. The figure shows that China government has sufficient financial sources to strengthen secondary distribution to subsidize the low-income group. In the long term, government can increase overall educational level and reduce the opportunity inequality to narrow the income gap.

Suggested Citation

  • Survey and Research Center for China Household Finance, SWUFE, 2013. "Report of China Household Income Disparity," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 8(3), pages 452-466, September.
    • Handle: RePEc:fec:journl:v:8:y:2013:i:3:p:452-466
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-002-013-0022-4
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    Cited by:

    1. Wohlrabe, Klaus, 2016. "Taking the Temperature: A Meta-Ranking of Economics Journals," MPRA Paper 68933, University Library of Munich, Germany.
    2. Lozanski, Kristin, 2015. "Transnational surrogacy: Canada's contradictions," Social Science & Medicine, Elsevier, vol. 124(C), pages 383-390.

    More about this item

    Keywords

    household finance; Gini; income disparity; social welfare; transfer payment;
    All these keywords.

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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