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Income Inequality, State Ownership, and the Pattern of Economic Growth – A Tale of the Kuznets Curve for China since 1978

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  • Ying Wu
  • Hong Yao

Abstract

The lack of supposed trickle-down benefits for industrialization to reduce income inequality during China’s 30 years of post-reform economic growth appears to constitute an anomaly for the inverted U-shaped Kuznets curve hypothesis. Using an alternative inequality measure that depends on factor share and ownership, we show that in a transition economy with the state weight of capital less than its market counterpart, enhanced state ownership exacerbates inequality. Econometric evidence suggests that although the government attempts to balance the three goals of growth, equality, and state ownership in the short run, stubborn state ownership as well as lopsided growth patterns jeopardize equality in the long run and have therefore delayed the turning point in the inverted U-shaped Kuznets curve for China. Copyright International Atlantic Economic Society 2015

Suggested Citation

  • Ying Wu & Hong Yao, 2015. "Income Inequality, State Ownership, and the Pattern of Economic Growth – A Tale of the Kuznets Curve for China since 1978," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(2), pages 165-180, June.
    • Handle: RePEc:kap:atlecj:v:43:y:2015:i:2:p:165-180
    DOI: 10.1007/s11293-015-9451-9
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    Cited by:

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    4. Le, Thai-Ha & Nguyen, Canh Phuc & Su, Thanh Dinh & Tran-Nam, Binh, 2020. "The Kuznets curve for export diversification and income inequality: Evidence from a global sample," Economic Analysis and Policy, Elsevier, vol. 65(C), pages 21-39.
    5. Byron Quito & María de la Cruz del Río‐Rama & José Álvarez‐García & Ronny Correa‐Quezada, 2022. "Impact factors and space‐time characteristics of income inequality in a global sample," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(6), pages 1850-1868, December.
    6. Charles RARICK & Kasia FIRLEJ, 2016. "Leadership and the Mandate of Heaven: Political Risk in China," Journal of Economics and Political Economy, KSP Journals, vol. 3(2), pages 183-191, June.
    7. Canh, Nguyen Phuc & Schinckus, Christophe & Thanh, Su Dinh & Hui Ling, Felicia Chong, 2020. "Effects of the internet, mobile, and land phones on income inequality and The Kuznets curve: Cross country analysis," Telecommunications Policy, Elsevier, vol. 44(10).

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    More about this item

    Keywords

    Income inequality; State ownership; Economic growth; Kuznets curve; O10; O50; P26;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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