China's Income Distribution over Time: Reasons for Rising Inequality
AbstractWe use a new method to estimate Chinaâ€™s income distributions using publicly available interval summary statistics from Chinaâ€™s largest national household survey. We examine rural, urban, and overall income distributions for each year from 1985-2001. By estimating the entire distributions, we can show how the distributions change directly as well as examine trends in traditional welfare indices such as the Gini. We find that inequality has increased substantially in both rural and urban areas. Using an inter-temporal decomposition of aggregate inequality, we determine that increases in inequality within the rural and urban sectors and the growing gap in rural and urban incomes have been equally responsible for the growth in overall inequality over the last two decades. However, the rural-urban income gap has played an increasingly important role in recent years. In contrast, only the growth of inequality within rural and urban areas is responsible for the increase in inequality in the United States, where the overall inequality is close to that of China. We also show that urban consumption inequality (which may be a better indicator of economic well-being than income inequality) rose considerably.
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Bibliographic InfoPaper provided by Department of Agricultural & Resource Economics, UC Berkeley in its series Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series with number qt166747gz.
Date of creation: 01 Feb 2004
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economic development; income distribution;
Other versions of this item:
- Wu, Ximing & Perloff, Jeffrey M, 2004. "China's income distribution over time: reasons for rising inequality," CUDARE Working Paper Series 0977, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- 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).
- Wu, Ximing & Perloff, Jeffrey M., 2004. "China's Income Distribution Over Time: Reasons for Rising Inequality," Institute for Research on Labor and Employment, Working Paper Series qt9jw2v939, Institute of Industrial Relations, UC Berkeley.
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