Different Faces of Inequality across Asia: Decomposition of Income Gaps across Demographic Groups

Economic inequality across Asia has been growing, but dimensions of this inequality and their development are unclear. This paper evaluates income inequality using household surveys from China, India, Japan, Korea, Russia and Taiwan. These countries may be viewed as jointly representative of Asia’s population, covering countries with various income levels, inequality and demographic profiles. This study assesses income gaps between various demographic groups in regard to households’ residence, administrative region, education, employment status and gender at various income quantiles, using unconditional quantile regressions. Gaps are decomposed into parts due to differentials in household endowments and due to differentials in returns to endowments. Rural/urban income gaps are evident across all evaluated countries, particularly in China, India and Russia, but have been falling in Russia and Taiwan. Inequality between disadvantaged and advantaged regions is high in China and India, followed by Taiwan. This gap stagnated in Taiwan and further deepened in Russia.