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Workers’ income risk and the evolution of income inequality in China

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  • Wang, Yan
  • Conesa, Juan Carlos

Abstract

We estimate the labor income process faced by Chinese workers in three distinct sectors. Agricultural workers experience the highest level of income risk and the lowest average income, whereas those in the private sector face significantly greater risk and lower average income compared to their non-private sector counterparts. We find a substantial increase in inequality across sectors, instead of increasing risk within sectors.

Suggested Citation

  • Wang, Yan & Conesa, Juan Carlos, 2024. "Workers’ income risk and the evolution of income inequality in China," Economics Letters, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:ecolet:v:234:y:2024:i:c:s0165176523005049
    DOI: 10.1016/j.econlet.2023.111478
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    References listed on IDEAS

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    1. Jonathan Heathcote & Kjetil Storesletten & Giovanni L. Violante, 2010. "The Macroeconomic Implications of Rising Wage Inequality in the United States," Journal of Political Economy, University of Chicago Press, vol. 118(4), pages 681-722, August.
    2. Raül Santaeulàlia-Llopis & Yu Zheng, 2018. "The Price of Growth: Consumption Insurance in China 1989–2009," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(4), pages 1-35, October.
    3. Wang, Yan & Conesa, Juan Carlos, 2022. "The role of demographics and migration for the future of economic growth in China," European Economic Review, Elsevier, vol. 144(C).
    4. Junsen Zhang, 2021. "A Survey on Income Inequality in China," Journal of Economic Literature, American Economic Association, vol. 59(4), pages 1191-1239, December.
    5. Thomas Piketty & Li Yang & Gabriel Zucman, 2019. "Capital Accumulation, Private Property, and Rising Inequality in China, 1978–2015," American Economic Review, American Economic Association, vol. 109(7), pages 2469-2496, July.
    6. Yu, Jihai & Zhu, Guozhong, 2013. "How uncertain is household income in China," Economics Letters, Elsevier, vol. 120(1), pages 74-78.
    7. Richard Blundell & Luigi Pistaferri & Ian Preston, 2008. "Consumption Inequality and Partial Insurance," American Economic Review, American Economic Association, vol. 98(5), pages 1887-1921, December.
    8. Haiyan Ding & Hui He, 2018. "A Tale of Transition: An Empirical Analysis of Economic Inequality in Urban China, 1986-2009," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 29, pages 106-137, July.
    9. Chamon, Marcos & Liu, Kai & Prasad, Eswar, 2013. "Income uncertainty and household savings in China," Journal of Development Economics, Elsevier, vol. 105(C), pages 164-177.
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    Cited by:

    1. Wang, Yan & Conesa, Juan Carlos, 2025. "The evolution of income and wealth inequality in China," Journal of Economic Dynamics and Control, Elsevier, vol. 179(C).
    2. Zhu, Chen & Wang, Zekai & Jiang, Qi & Xie, Chang, 2024. "Does industry monopolization widen wage residual inequality In China?," International Review of Economics & Finance, Elsevier, vol. 96(PA).

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    Keywords

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    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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