Inequality of opportunity and income inequality in nine Chinese provinces, 1989-2006
While there is a large and growing body of research describing and analyzing changes in the Chinese income distribution, researchers have paid considerable less attention to inequality of opportunity. The aim of this paper is to contribute to filling this gap in the literature. The two main questions addressed empirically for the first time in a Chinese context are: to what extent are individuals' incomes and individual income differences due to factors beyond the individual's control (in Roemer's terminology "circumstances") and to what extent are they due to outcomes of the individual's own choices ("effort"). What is the relationship between income inequality and inequality of opportunity? For this purpose we use data from the China Health and Nutrition Survey collected from nine provinces during the period 1989 to 2006. The CHNS has detailed information about incomes and other factors enabling us to construct a host of circumstance and effort variables for the offspring. We find that China has a substantial degree of inequality of opportunity. Parental income and parents' type of employer explain about two thirds of the total inequality of opportunity. Notably, parental education plays only a minor role implying that parental connections remain important. The results show that the increase in income inequality during the period under study largely mirrors the increase in inequality of opportunity. Thus, increased income inequality does not reflect changes in effort variables, or expressed differently, increased income inequality has not been accompanied by a decrease in inequality of opportunity.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Solon, Gary, 1999. "Intergenerational mobility in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 29, pages 1761-1800 Elsevier.
- Alberto Alesina & George-Marios Angeletos, 2005.
"Fairness and Redistribution,"
American Economic Review,
American Economic Association, vol. 95(4), pages 960-980, September.
- Angeletos, George-Marios & Alesina, Alberto, 2005. "Fairness and Redistribution," Scholarly Articles 4553009, Harvard University Department of Economics.
- Alberto Alesina & George-Marios Angeletos, 2004. "Fairness and Redistribution," NajEcon Working Paper Reviews 122247000000000306, www.najecon.org.
- Alberto Alesina & George-Marios Angeletos, 2004. "Fairness and Redistribution," Levine's Bibliography 122247000000000283, UCLA Department of Economics.
- Checchi, Daniele & Peragine, Vito, 2005. "Regional Disparities and Inequality of Opportunity: The Case of Italy," IZA Discussion Papers 1874, Institute for the Study of Labor (IZA).
- Shujie Yao & Jirui Liu, 1996. "Decomposition of Gini coefficients by class: a new approach," Applied Economics Letters, Taylor & Francis Journals, vol. 3(2), pages 115-119.
- Blanden, Jo & Alissa Goodman & Paul Gregg & Stephen Machin, 2002.
"Changes in Intergenerational Mobility in Britain,"
Royal Economic Society Annual Conference 2002
31, Royal Economic Society.
- Jo Blanden & Alissa Goodman & Paul Gregg & Stephen Machin, 2002. "Changes in Intergenerational Mobility in Britain," CEP Discussion Papers dp0517, Centre for Economic Performance, LSE.
- Jo Blanden & Alissa Goodman & Paul Gregg & Stephen Machin, 2002. "Changes in intergenerational mobility in Britain," LSE Research Online Documents on Economics 19507, London School of Economics and Political Science, LSE Library.
- Jo Blanden & Alissa Goodman & Paul Gregg & Stephen Machin, 2002. "Changes in Intergenerational Mobility in Britain," CEE Discussion Papers 0026, Centre for the Economics of Education, LSE.
- Denis Cogneau & Thomas Bossuroy & Philippe De Vreyer & Charlotte Guénard & Victor Hiller & Phillippe Leite & Sandrine Mesplé-Somps & Laure Pasquier-Doumer & Constance Torelli, 2006. "Inequalities and equity in Africa," Working Papers DT/2006/11, DIAL (Développement, Institutions et Mondialisation).
- Knight, J. & Lina, S., 1990.
"The Determinants Of Urban Income Inequality In China,"
Economics Series Working Papers
9991, University of Oxford, Department of Economics.
- Knight, John B & Song, Lina, 1991. "The Determinants of Urban Income Inequality in China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 53(2), pages 123-54, May.
- Kanbur, Ravi & Zhang, Xiaobo, 1999. "Which Regional Inequality? The Evolution of Rural-Urban and Inland-Coastal Inequality in China from 1983 to 1995," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 686-701, December.
- Chen, Yuanyuan & Feng, Shuaizhang, 2009. "Parental Education and Wages: Evidence from China," IZA Discussion Papers 4218, Institute for the Study of Labor (IZA).
- Nico Heerink & Marijke Kuiper & Xiaoping Shi, 2006.
"China's New Rural Income Support Policy: Impacts on Grain Production and Rural Income Inequality,"
China & World Economy,
Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(6), pages 58-69.
- Heerink, Nico & Kuiper, Marijke H. & Xiaoping, Shi, 2006. "China's New Rural Income Support Policy: Impact on Grain Production and Rural Income Inequality," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25625, International Association of Agricultural Economists.
- Luo, Xubei & Zhu, Nong, 2008. "Rising income inequality in China : a race to the top," Policy Research Working Paper Series 4700, The World Bank.
- Javier Núñez & Andrea Tartakowsky, 2007. "Inequality of outcomes vs. inequality of opportunities in a developing country. An exploratory analysis for Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 34(2 Year 20), pages 185-202, December.
- Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
- Bliss, C., 1993. "External trade and income distribution : Francois Bourguignon and Christian Morrison, (OECD, Paris, 1989) pp. 304, FF190," Journal of Development Economics, Elsevier, vol. 41(1), pages 207-209, June.
- Jean Tirole & Roland Benabou, 2004.
"Belief in a Just World and Redistributive Politics,"
2004 Meeting Papers
15, Society for Economic Dynamics.
- Roland Bénabou & Jean Tirole, 2006. "Belief in a Just World and Redistributive Politics," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 699-746.
- Jean Tirole & Roland Bénabou, 2006. "Belief in Just World and Redistributive Politics," Post-Print hal-00173678, HAL.
- Bénabou, Roland & Tirole, Jean, 2005. "Belief in a Just World and Redistributive Politics," CEPR Discussion Papers 4952, C.E.P.R. Discussion Papers.
- Roland Benabou & Jean Tirole, 2005. "Belief in a Just World and Redistributive Politics," NBER Working Papers 11208, National Bureau of Economic Research, Inc.
- Benabou, Roland & Tirole, Jean, 2004. "Belief in a Just World and Redistributive Politics," Papers 08-15-2005a, Princeton University, Research Program in Political Economy.
- Francisco H. G. Ferreira & Jérémie Gignoux, 2011.
"The Measurement Of Inequality Of Opportunity: Theory And An Application To Latin America,"
Review of Income and Wealth,
International Association for Research in Income and Wealth, vol. 57(4), pages 622-657, December.
- Ferreira , Francisco H. G. & Gignoux, Jeremie, 2008. "The measurement of inequality of opportunity : theory and an application to Latin America," Policy Research Working Paper Series 4659, The World Bank.
- Gustafsson, Bjorn & Shi, Li, 2002. "Income inequality within and across counties in rural China 1988 and 1995," Journal of Development Economics, Elsevier, vol. 69(1), pages 179-204, October.
- Bourguignon, Francois & Ferreira, Francisco H. G. & Walton, Michael, 2006.
"Equity, Efficient and Inequality Traps: A Research Agenda,"
Working Paper Series
rwp06-025, Harvard University, John F. Kennedy School of Government.
- François Bourguignon & Francisco Ferreira & Michael Walton, 2007. "Equity, efficiency and inequality traps: A research agenda," Journal of Economic Inequality, Springer, vol. 5(2), pages 235-256, August.
- François Bourguignon & Francisco Ferreira & Michael Walton, 2007. "Equity, efficiency and inequality traps: A research agenda," Post-Print halshs-00754212, HAL.
- Shujie Yao, 1999. "On the decomposition of Gini coefficients by population class and income source: a spreadsheet approach and application," Applied Economics, Taylor & Francis Journals, vol. 31(10), pages 1249-1264.
- François Bourguignon & Francisco H. G. Ferreira & Marta Menendez, 2003.
"Inequality of outcomes and inequality of opportunities in Brazil,"
Textos para discussão
478, Department of Economics PUC-Rio (Brazil).
- François Bourguignon & Francisco H.G. Ferreira & Marta Menéndez, 2003. "Inequality of Outcomes and Inequality of Opportunities in Brazil," William Davidson Institute Working Papers Series 2003-630, William Davidson Institute at the University of Michigan.
- Fran?s Bourguignon & Francisco H. G. Ferreira & Marta Menendez, 2003. "Inequality of outcomes and inequality of opportunities in Brazil," Policy Research Working Paper Series 3174, The World Bank.
- François Bourguignon & Francisco H. G. Ferreira & Marta Menendez, 2003. "Inequality of Outcomes and Inequality of Opportunities in Brasil," DELTA Working Papers 2003-24, DELTA (Ecole normale supérieure).
- Denis Cogneau & Sandrine Mesplé-Somps, 2008.
"Inequality of Opportunity for Income in Five Countries of Africa,"
DT/2008/04, DIAL (Développement, Institutions et Mondialisation).
- Cogneau, Denis & Mesplé-Somps, Sandrine, 2008. "Inequality of Opportunity for Income in Five Countries of Africa," Economics Papers from University Paris Dauphine 123456789/4320, Paris Dauphine University.
- Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2002. "Growth, inequality, and poverty in rural China: the role of public investments," Research reports 125, International Food Policy Research Institute (IFPRI).
- Roemer,John E., 2006.
"Democracy, Education, and Equality,"
Cambridge University Press, number 9780521609135.
- Zimmerman, David J, 1992. "Regression toward Mediocrity in Economic Stature," American Economic Review, American Economic Association, vol. 82(3), pages 409-29, June.
- Lu, Ding, 2002. "Rural-urban income disparity: impact of growth, allocative efficiency, and local growth welfare," China Economic Review, Elsevier, vol. 13(4), pages 419-429, December.
When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:21:y:2010:i:4:p:607-616. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.